Europeans face a huge challenge

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

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

The vote to leave shows that Britain 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, which comprises 28 countries and 500 million people.

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

But Britain 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 is a global currency.

The referendum result, however, rejected this principle of "one union, two systems" that differentiated Britain from other EU members.

To deal with the situation created by the vote, the bloc leaders met on June 28 and 29. The EU leaders and institutions will now 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 to decide how to deal with the outcome.

At the meeting, British Prime Minister David Cameron apprised the European Council of Britain's exit from the bloc. The exit procedure, however, could take about two years to complete.

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

Second, the vote is likely to change the political landscape in Britain, 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 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.

Brexit will indeed have an impact on the EU, but we should not forget that Britain always had its own currency and immigration rules. 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 Bureau. Contact the writer at fujing@chinadaily.com.cn

(China Daily European Weekly 07/02/2016 page10)