Keep Calm and Go Slow

No need to rush this.

Photographer: ODD ANDERSEN/AFP/Getty Images

Britain's decision to leave the European Union came as an enormous shock to investors worldwide, Europe's leaders and, apparently, many of the people who voted for it. Nonetheless, the choice has been made, and attention must now turn to making the best of it.

That means taking things slowly. Disentangling the U.K. from 43 years of engagement with EU laws and procedures will be a long process, and the new relationship between Britain and the EU is far from clear. Dithering is to be avoided -- and so are hasty declarations about what can or cannot be done.

QuickTake Why Britain Voted to Leave the EU

German Chancellor Angela Merkel struck the right tone this weekend when she said that Britain would remain a close partner and that the terms of separation weren't about "deterrence." Other EU leaders weren't so magnanimous.

One can understand why. Many felt betrayed by Prime Minister David Cameron's decision to call a referendum in the first place -- fearing this very result. They might be forgiven for thinking that Britain must reap what it has sown. Many will also think that punishing the rebellious Brits serves a tactical purpose by stifling populist rebellion elsewhere in the union.

Such an approach would be unwise. Managing this transition smoothly is very much in Europe's interests, and restoring calm should be paramount. EU leaders shouldn't need reminding that stress can easily get out of control. In addition, Britain's two-way trade with the EU is substantial: There's a vital mutual interest in maintaining it. As for punishing the Brits to quell anti-EU sentiment elsewhere, that could all too easily backfire. Scaring the public into staying doesn't work so well, as the U.K. government can attest.

The U.K. needs a pause to restore some semblance of political stability. Cameron has said he will resign within months. An election isn't immediately in prospect, but the country's new prime minister and cabinet are yet to be decided, so preparations for exit can't move forward with proper leadership. The opposition Labour Party is also in turmoil, and calls are mounting for a new leader. Nerves need to settle before Westminster can move this process forward.

Scotland and Northern Ireland present additional challenges, with leaders in both places calling for their own referendums on independence. These questions will have to be addressed, but new polls should wait until the U.K.'s future relationship with the EU -- and what it means for Scotland and Northern Ireland -- becomes clearer.

In forming the new government in Westminster, one of the new team's biggest challenges is already apparent. The Leave campaigners are divided between an outward-looking faction favoring open markets and permissive rules for skilled immigrants, and an inward-looking faction concerned above all with controlling immigration more tightly. It's crucial for Britain, and all of Europe, that the new government sets a liberal, outward-looking course.

Again, if the EU's leaders take an unduly hard line, they'll make that result less likely. The EU shouldn't want Britain to succumb to inward-looking populism -- a prospect that would risk further energizing the same sentiments in the rest of the EU.

There's no template or timetable for the talks. Article 50 of the EU's Lisbon Treaty provides for two years of negotiations before the U.K. withdraws, but it has never been invoked. Some of Europe's leaders are pressing to start the clock as soon as possible. There's no need. They shouldn't set a deadline without a full understanding of the work required before it comes due.

Britain and Europe should get this done as soon as possible -- but no sooner. Right now, everybody should take a deep breath, think more and pronounce less.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.