Last Thursday, the world watched in shock as the UK made history by voting in favour of Brexit.
Now the unthinkable is a reality.
The UK will be the first country to leave the European Union.
The result was close. And the aftermath has left regrets and fear around the country.
But Cameron left no leeway for his successor during his resignation speech.
The vote is final.
Like any divorce, the decision has torn the country. And it has showed how divided the UK public is in regards to the EU experiment.
While Scotland, Northern Ireland and London voted to remain, the rest of the regions voted to leave.
The voting sent markets and currencies in a downward spiral.
And, with the referendum, UK citizens sent a message to Europe: The European Union is not working in its current format.
They are frustrated and fed up with the current system.
They are tired of the bureaucracy; of the austerity measures that have increased inequality; debt; and the mismanagement of the refugee crisis.
And they are not the only ones.
According to Pew Research, the majority of Greeks, and over 40% of Germans, Dutch, Swedish and Hungarians want some EU power returned to their national government.
You see, the Brexit referendum sparked the debate about the European Union.
And it has brought up complaints that are common in other European countries.
People are disillusioned with the European Union.
And it is feeding feelings of nationalism. That’s why the far right has been growing all over Europe. And now they are taking advantage of the Brexit aftermath to call for their countries to leave the EU.
So the Brexit is just the beginning of the debate.
And even though the Brexit, and Cameron’s quick resignation, will bring months of uncertainty to the UK, the EU is the one most in trouble.
The UK leaving will mean that the EU will be losing a strong partner that provides high contributions to the EU.
And while the UK has low unemployment and is in control of its own currency, EU countries are fighting with high unemployment and low growth.
Many EU countries have been fuelling economic growth by taking on debt. Greece, Portugal, Belgium, Cyprus, Italy and Spain have already surpassed the 100% to GDP mark.
The pound has taken a fall in the last couple of days, but so has the euro.
And there is still the small matter of the refugee crisis.
The Brexit will kill any of the EU recovery signs we saw during the last few months. And it may even spark a new economic crisis.
Britain will most likely survive leaving the EU, but will the EU survive a Brexit?
For The Daily Reckoning
PS: Selva recently joined the Port Phillip Publishing team as our macroeconomic analyst. She works closely with The Daily Reckoning editor Vern Gowdie on his advisory service, The Gowdie Letter.