Europeans face a huge challenge

Li Feng / China Daily

The majority of Britons have voted to leave the European Union, which is like a political earthquake for Europe. As to the level of damage it would cause, it will be no less than the upheaval brought about by Europe's financial and sovereign debt crisis in 2008-09, which still continues.

The EU prevented the exit of Greece, but failed to keep the UK within its fold.

The "Leave" vote shows the UK has refused to accept the terms the EU set for it in February－that Britain would be treated as a special member of the bloc, comprising 28 countries and 500 million people.

For the special status, a compromise was worked out to let the UK permanently stay out of the eurozone and Schengen Agreement. That would have allowed the UK to follow its own regulations while the other EU member states worked toward a "closer union".

But the UK wanted to keep its global competitive position as a financial center and was unwilling to concede its financial and economic sovereignty to Brussels, which has binding monetary and financial institutional arrangements in the 19 eurozone countries to deal with the sovereign debt crisis.

The EU set up a financial firewall and banking union, which triggered disagreements, to a certain extent, with the UK whose pound sterling is a global currency.

The referendum result, however, rejected this principle of "One Union, Two Systems" that differentiated the UK from other EU members.

To deal with the situation created by the "Leave" vote, the bloc leaders will meet on June 28-29. The EU leaders and institutions will work overtime to cope with the biggest challenge since the bloc started taking shape after World War II.

European Council President Donald Tusk, European Parliament President Martin Schulz, European Commission President Jean-Claude Juncker and Prime Minister of the Netherlands Mark Rutte will consult each other to decide how to deal with the outcome.

And at the June 28-29 meeting, British Prime Minister David Cameron may apprise the European Council of the UK's exit from the bloc.

The exit procedure, however, could take about two years to complete.

As far as the "Leave" vote is concerned, it will be multi-faceted. First, it may have a domino effect on other EU members and prompt them to negotiate special terms by warning that they, too, would exit the union. Some politicians in the Netherlands seem eager to do that, and the political trend in the EU is one of rightwing and populist forces gaining strength.

Second, the vote is likely to change the political landscape of the UK and its consequences will affect the country's economic and social development.

Third, how the blow to EU's solidarity and confidence will affect the global financial market and economic growth remains to be seen, but given the experience of the sovereign debt crisis of the past few years, the interactions among politicians, the market, the media and the public could be vicious.

In a nutshell, the "Leave" vote will lead to instability, at least in the short term, in the EU, so the international community should prepare to take measures to cope with it.

Brexit will indeed have an impact on the EU, but we should not forget that Britain always had its own currency and immigration rules, and rejected the free flow of people. At present, however, the international community should have confidence in the EU, and at the same time encourage it to carry out the much-needed reforms, because such a great peace project should not be allowed to fail.

The author is deputy chief of China Daily European Edition. fujing@chinadaily.com.cn