Next Thursday, June 23, Britons will cast their votes to either remain in, or leave, the European Union. Leaving would have far-reaching effects on the British, European and to a lesser degree – American, economies. Wall Street and The City are watching the polls closely. Economists and businesspeople are speculating on the impact of an exit and each side is mounting an intense campaign with only one week to go before the vote. However, should Britons vote to exit, leaving the Union is an extremely lengthy process. “It seems many on Wall Street believe that British economic life will change immediately on Friday, July 24 should they vote to exit. That’s not correct” said Frank Beck, President of Beck Capital. “Under the terms of Article 50 in the Lisbon Treaty, the entire exiting process could take up to two years. There would be a complicated negotiation between the British and the European Council. A lot could happen during that time” said Mr. Beck. While a vote could cause short-term volatility in equity, fixed income and foreign exchange markets, over-reactions may provide astute investors with opportunities to take new positions. To read the terms of Article 50 in the Lisbon Treaty click here.
