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Jul 05, 2016

Brexit could leave the EU in ruins

Britain's EU exit has triggered many other EU nations to call for their own referendums on their EU membership

Leading political parties in France, the Netherlands, Italy and Greece have all called for their own referendums on EU membership following the Brexit vote last month.

However, according to portfolio.hu, further In/Out referendums on European Union or Eurozone membership are unlikely in any EU country in the near-term (at least for the next year or so).

Nevertheless, political risks in Europe are high and probably rising, accelerated by the immigration crisis, which has served as a lightning rod for public discontent, denting leaders’ approval ratings faster and more deeply than during the Eurozone crisis, analysts at Citigroup said in a recently published research note.

Further possible strengthening of populist and EU-sceptic political parties greatly depends on how Brussels will settle its relationship with the United Kingdom and excessive leniency might lead to the demise of the EU in the long term, they added.

The UK’s vote on 23 June to leave the EU could be a watershed moment in terms of Vox Populi risk, Citi analysts said in a research note on 2 July, adding that EU/euro-sceptic parties may gain strength.

"It raises the question if and how other EU countries could follow its example, and ultimately whether the UK’s pro-Brexit referendum result heralds a wider systemic political risk that threatens the EU project over the medium- to long-term."

In regards to potential referendums on EU membership, many EU countries are similar to the UK as scepticism towards the EU is quite high, and sometimes higher than in the UK, in a number of other EU countries.

Sentiment towards the EU has historically varied quite significantly across time as well as across EU countries.

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