Uh Oh

After Brexit, What Happens to the Survivors?

The U.K. vote to leave the EU may not kill it, but the panic is a contagion affecting everyone from stock traders in New York to beachgoers in Italy.

PARIS — As Britain’s “Brexit” vote to leave the European Union approached, apocalyptic prophecies could be heard echoing from one corner of the Continent to the other. In a particularly extraordinary statement, European Council President Donald Tusk declared, “Brexit could be the beginning of the destruction of not only the EU but also of western political civilization in its entirety.”

Now the deed is done, the vote taken, the Leave faction has won and shock waves are spreading around the world. British Prime Minister David Cameron has announced his resignation, the pound sterling has tanked and stock markets from Tokyo to New York have taken huge hits. The Kremlin is rejoicing and far-right-wing nationalist parties in Europe are exulting.

Indeed, so is Donald Trump, who landed in Scotland a few hours after the Brexit results came in and declared, “They took back their country, it’s a great thing... People are angry all over the world.”

Right-wing politicians who have made EU-bashing the “acceptable” face of parties once known for thinly disguised racism and xenophobia echoed Trump’s enthusiasm.

France’s Marine Le Pen, who wants to pull France out of the European Union, which it helped to found after World War II, said, “Europe [meaning the EU] will be at the heart of the next presidential campaign.” And, take note, extremist or not, she is expected to win the first round of that contest by a substantial plurality, even if she loses to a more moderate figure in the second round runoff for the presidency.

And then there’s Russia, which annexed Crimea and cranked up a “hybrid” war of rebellion in Ukraine because people in Kiev had the temerity to favor a closer alliance with the EU and distance themselves from the Kremlin.

For Russian President Vladimir Putin, anything that undermines the unity and credibility of Western Europe is a plus. The former U.S. Ambassador in Moscow, Michael McFaul, says bluntly that “the result of the U.K. referendum is Putin’s victory.”

More responsible leaders are trying rather desperately to shore up confidence in the future.

The unpopular French president, François Hollande, with eloquence unusual for him, said the European Union must re-think the way it works. It is, he said, “a big idea and not only a big market.”

But at least two years of negotiations, maybe more, will be required before we know how bad (or good) things really are, and whether the big market, much less the big idea, can survive.

In the meantime, from health clinics in France to the beaches of Italy and far beyond, there are countless questions to be answered.

When the soon-to-be erstwhile British Prime Minister David Cameron gave his consolatory speech about the British public’s decision to ++ditch U.K. membership in the European Union++[[ http://www.thedailybeast.com/articles/2016/06/24/brexit-shock-pound-collapses-as-britain-plunges-into-isolation.html ]], he said two things that Brits now sunning themselves by their pools at their summer homes in sunny Tuscany and the Greek islands might note with special interest: “I would also reassure Britons living in European countries and European citizens living here there will be no immediate changes in your circumstances.” (Our italics.) We can assume “immediate” in this case means that, essentially, they can stay for lunch, and, likely the rest of the summer. 

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He also said, “There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold.” Initial, of course, being the operative word here since it implies that there will be a phase of adjustment as Europe decides what to do. And, make no mistake, the ball is now in Europe’s court, not the U.K.’s.

What Cameron said next is what really counts. “We must now prepare for a negotiation with the European Union,” he said before announcing “we” didn’t mean “he” and that he had no intention of staying on to lead those negotiations, which very well could be hostile. German Foreign Minister Frank Walter Steinmeier called the vote “a sad day for Europe” before calling an emergency EU foreign ministers meeting for Sunday, to which the U.K. is not invited.

Italy’s Prime Minister Matteo Renzi called an emergency meeting on Friday to try to sort out what to do next as European markets spiraled out of control. The day before the vote, he wrote an open letter urging the U.K. to stay. “It would be a mistake for which you the voters primarily would pay the price," he wrote. “Who really wants Britain to be small and isolated?”

The questions that now remain are daunting for the 2.2 million Brits who live abroad, and the 1 million who have holiday homes in sunny spots like Italy, Spain and Greece. The only certainty is that things will change, and those changes almost certainly won’t be for the better.

Briton Ian McHugh, 51, is an entrepreneur who bought a dream villa in Tuscany in 2012 that he has fixed up with the intention of retiring in Italy. He was as shocked as anyone to wake up on Friday morning to news that the Leave campaign has forced a Brexit.

“I'm not concerned that my movements to and from Italy are going to be restricted. However I do worry about the long term economic effects of the decision, both in the U.K. and also with other discontented countries from the remaining 27,” he told The Daily Beast. “We really don't need another recession. But the electorate have spoken and now we all just need to focus on making it work.”

Just how it is all going to work is what is most complicated.

Putting aside for the moment how the Brexit vote will affect the E.U. economically, which will be felt most in the northern nations that have lucrative business deals with the U.K., and where bilateral negotiations will likely be more favorable for the UK, let’s focus for a moment on the Brits who live and work in Europe.

All manner of issues are at stake. Those Brits who live and work in Europe now don’t have to bother with work permits, permits to stay, or student visas for those Brits studying abroad in Europe. They don’t have to get a European driver’s license, and they don’t have to pay value added tax on hotels and holiday homes like, say, Americans or Russians do.

Then there’s the question of healthcare and pensions. How can a non-European, which is what Brits are about to be, expect to enjoy the same EU-tax benefits on pensions if they are suddenly EU-outsiders? And will they now have to pay for health care if they get sick on the continent and summer islands as non-EU citizens do?

Those who supported the vote to leave made vague promises that the EU would treat UK citizens differently than other non-Europeans. But that doesn’t seem to be an easy promise to fulfill. Right now Europe is facing a massive immigrant and refugee crisis that makes free movement from country to country ever more difficult. Brits, now no longer EU citizens, surely can’t still use the fast-track “EU Only” passport queues.

Anyone who has lived in the EU for five years or more can apply for a restricted EU long-term residency status under EU law, which is what many Brits abroad are no doubt scrambling to do. But that residency is far more restricted than actual EU citizenship, and it would mean that Brits can’t vote in local elections and may be required to speak the host nation’s language, according to the European Union’s webpage outlining citizenship rights, which crashed momentarily on Friday, no doubt from a rush to find out information.

Property ownership, of course, is another matter. According to “A Place in the Sun,” one of the most popular resources for Brits living in Europe’s sunny spots,   “The main area of contention is how property inheritance and taxation laws would apply; at the moment the rules treat EU and non-EU citizens differently.”

Getting a mortgage to buy property would also be tricky since EU banks automatically treat non-EU citizens as high risk, making it harder to get loans and open accounts. The list goes on and on.