Aside from the immediate impact on financial markets, and the potential for it to dampen global economic activity as a consequence, the great overarching concern stemming from this week’s Brexit vote is the longer-term future of the European Union itself.
Should the UK elect to leave the EU on Thursday, many fear that it will create a domino effect across Europe, bringing into question the very future of the EU.
If one of its strongest members decides to leave, what’s stopping other member states from following in its footsteps?
While some may deem this to be far-fetched, as this excellent chart from HSBC reveals, the popularity of Eurosceptic opposition parties is continuing to grow in many European nations, underscoring why so many believe a UK exit could be the start of many.
“The political contagion could be significantly more damaging,” says Karen Ward and Janet Henry, senior members of HSBC’s economics team.
“In the UK referendum, the key arguments for the Leave campaign essentially boil down to questions over migration and sovereignty, which are concerns for much of the EU electorate.
“Given the rise in popularity of many of these parties over the past year, this could unsettle markets.”
While these arguments are purely hypothetical at this stage, coming before the UK referendum takes place, it’s easy to see why many deem the June 23 vote as not just about the UK leaving the EU, but rather the future of the EU as a whole.
Should the Brexit vote prevail, it’s likely this is where market concerns will concentrate, particularly in those states with near-term elections scheduled.