What happens to the expats?
This is a complicated question that has consequences for millions of people across the EU. About 1.3 million Britons live in EU countries (Spain, Ireland, and France are their top destinations). About 3 million EU citizens live in the U.K. (Poles, Irish, and Germans are the top three groups). Nothing changes for any of them until the U.K. officially leaves the EU. But as the U.K. negotiates the terms of its exit, the fate of these approximately 4.3 million people is likely to be a top concern. The two sides could continue to allow the free right to work—but that’s unlikely given how European immigration to the U.K. was seen as a driver for the vote to leave. What we are likely to see are restrictions on the movement of workers that range from limited to extreme.
Some EU citizens might have to apply for work permits to live and work in the U.K., which at present has a points-based system for workers from outside the EU. U.K. expatriates in Europe may have to apply for a Blue Card work permit in EU countries, which have restrictive rules for non-EU citizens looking to live and work within their borders. There are also tax and inheritance consequences for expatriates who own property in the U.K. and the EU.
Are there economic consequences?
If the global markets Friday are to be believed, then the answer is yes. But one day’s data does not an economic trend make, so we’ll point you to the boatloads of mainstream economists and international financial institutions that predicted dire economic consequences in the event of a “leave” vote.
Fed Chair Janet Yellen warned of “significant economic repercussions.” Roberto Azevedo, the head of the World Trade Organization, said leaving the EU would cost Britons an extra $13.2 billion in import tariffs. The nonpartisan Institute for Fiscal Studies warned that Britain could face two more years of austerity measures if it votes to leave the EU. The OECD said Brexit would constitute a tax of £2200 per household per year (about $3,000) by 2020 and up to £5000 ($6,817) by 2030. International Monetary Fund chief Christine Lagarde said the impact of Brexit on the U.K.’s economy could range from “pretty bad to very, very bad.” And, finally, Mark Carney, the governor of the Bank of England, warned the consequences “could possibly include a technical recession.”
What about the impact on rules and regulations?
The FT says untangling U.K. rules from the EU’s “would take years and could create constitutional mayhem.” The “leave” vote has consequences not only for British citizens, companies, and public authorities, but also London’s relationship with Scotland, Wales, and Northern Ireland. Laws in those places say acts of their legislative bodies that don’t comply with EU rules are not law.
The problem, as the FT points out:
The nature of the British legal system poses particular challenges for those wanting to roll back existing EU legislation: much of it has been incorporated into British law and tested in the courts, and has thus become part of case law. This means that, even if a statute is removed, its principles — for example, on legislation governing workers’ rights — would remain in force.
To put the scale of what’s happening in context, here’s Daniel Shurman, a partner at Allen & Overy, who told the FT Brexit was a case “of the world’s fifth-largest economy leaving the world’s largest trade bloc.”