On June 23, 2016, the United Kingdom chose to leave the European Union in a historic and unprecedented vote. From crashing stocks and the pound dropping to its lowest value in over 30 years, the aftermath was felt abruptly.

The European Union

Let’s start with the basics. The European Union (EU) is an economic and political partnership between 28 European countries. The EU was created after World War Two with the idea that countries that work together are less likely to shoot each other. The goal of the EU was to maintain peace, create a common set of European laws, values and markets, and achieve political stability. The EU is now considered a single market (which will be discussed later).

United Kingdom vs. Britain vs. England

The United Kingdom (UK) is compromised of England, Scotland, Wales, and Northern Ireland while Great Britain does not include Northern Ireland. The entire UK was considered one of the 28 countries in the EU. The future of the UK is questionable because of the dramatic voting differences in each country. England voted to leave in a 53.4 to 46.6% vote. Wales also voted to leave 52.5 to 47.5%. Northern Ireland chose to remain in a 65.8 to 44.2% vote. Lastly, Scotland voted 62 to 38% to remain. Although two of the four countries that make up the UK voted to stay, the UK as a whole has voted to leave. Some are beginning to speculate whether Scotland and Northern Ireland will remain a part of the UK. It could be a possibly for Scotland and Northern Ireland to remain in the EU while Wales and England leave. Looking into the future, if Scotland does vote to leave Britain, they may not be approved to stay in the EU.

David Cameron

A major result of the vote was the resignation of British Prime Minister David Cameron. A huge advocate to remain in the EU, Cameron was unsuccessful in persuading the Britons to stay. In an emotional statement given the day following the vote, Cameron stated “I will do everything I can as Prime Minister to steady the ship over the coming weeks and months, but I do not think it will be right for me to try to be the captain that steers our country to its next destination.” Cameron was elected in 2010 and had a predominant role in British leadership and the status with allies, including the United States. His successor will now need to determine when to invoke the exit that will then start the formal legal process of withdrawing. No country has ever left the EU before so how the process will work is not completely known.

Free Falling Currency

Upon the decision of the UK, the pound went into a free fall crash. Unlike most of the other members of the EU, the UK did not use the euro. The UK’s currency, the pound, crashed to its lowest level since 1985. This decision may have also contributed to France’s stock market falling 8%, Germany’s fall of 7%, and the Dow in the United States dropping by 3% the day following the vote. The declining value of the pound will also have effects on American trade and could send both economies backward.

Single Market

The future of the UK market is dependent on what kind of deal the UK and the EU agree on. The EU completed a single market in 1992, which allows free movement of goods, services, money, and people within the EU. If the UK remains within the single market, there would still be free movement of workers rights thus allowing UK citizens to work in the EU and vice versa. However, they could opt to impose work permits that would require Britons to apply for work visas. It also seems unlikely that tourists would be affected by the Brexit.

The referendum is not legally binding, but it is difficult to imagine that the British government would ignore the outcome of the vote. This means that the UK is going to leave the world’s largest common market. The future of the UK is unknown and the effects of this referendum will be global. If the UK would want to rejoin the EU in the future, they would have to start from scratch because there is no rejoining admissions process.