Before Brexit, many reports published by prominent research institutes predicted it would cause a collapse in financial markets followed by potentially systemic consequences, especially for Europe. Weeks later, the earthquake didn’t take place and apart from a few days of financial free fall – about 8% for stocks markets in Paris and Frankfurt – stocks have firmly taken back the road up. The US index (DJIA) even reached a new record high, providing further evidence that US stocks could now be considered as “safe haven” as a result of the European upheaval.
Should one therefore welcome the non-realization of the much dreaded disaster scenario? Not at all, Cyceon correspondents warned, according to whom the consequences of the Brexit will materialize as the United Kingdom (UK) will take concrete steps such as Article 50 to actually leave the European Union (EU). The Brexit was voted indeed but nothing has really happened yet. The quick succession of British Prime Minister David Cameron by strong Theresa May has much lowered the immediate political risk. The other risk factor comes paradoxically from the absence of serious consequences.
From a political viewpoint, the warning repeated by anti-Brexit activists about the immediate risks inherent in an exit from the EU didn’t become reality, making pro-Brexit counterparts even more determined in their vote. The latters denounced the hysterization of the debate with a view to frightening those who were hesitating about voting in favor of the Brexit. Finally, none analyst doubts that the realization of the Brexit will generate strong turbulence, however this is once again the political speech that has lost much of its credibility.
Indeed, many pro-Brexit supporters think that given that nothing happened, anti-Brexit rivals lied. No too fast one’d say because consequences have yet to materialize, and nobody knows their magnitude.