With the United Kingdom voting on Thursday to officially leave the European Union, many Americans are asking themselves "What the hell does that mean?" The quick answer, absolutely nobody knows.
The EU is a complicated economic and political alliance with open borders, a common currency shared by some, and enough contradictions to make your head spin. The repercussions of the U.K. leaving will be endless and utterly unpredictable. The reason why for this massive uncertainty is that EU's alliance relies on open trade, free movement of people, and a weak central government that manages everything from tax policy to work visas to immigration. Many American pundits have compared the EU to a stronger NAFTA where nations are not only economically tied, but governments as well. That analogy is close, but a more apt comparison would be California leaving the U.S.
The United Kingdom is the 2nd largest economy in the EU with 2.6 trillion in GDP. This accounts for nearly 18% of the entire EU economy. California's GDP is $2.5 trillion and makes up 15% of the entire U.S. economy. Furthermore, many EU residents live and work in the United Kingdom, but are not English citizens themselves. To continue with analogy, this would be like a resident of Iowa moving to California to live and work, and then for Donald Trump to lead a ridiculous movement that led to California leaving the United States. They wouldn't be a true Californian, they were relying on their common U.S. citizenship, but now their employment and residency might be up for debate with them voting to leave the U.S.
The Brexit should not be taken lightly. Fortunately, England doesn't use the Euro for its currency but with the pound reaching a 31-year low this morning, that probably isn't their saving grace. So when Americans are asking "What happens next?" just keep in mind that this is unprecedented, huge, and similar to an economy like California's leaving the United States. Nobody knows what's going to happen next, but its going to be massive because everything from Britain's economy to its government to its people are intrinsically tied to the EU and their markets. Well not any more, they're not.