What next for Europe?

Brexit could well prove worse for the continent than for Britain.

The immediate reaction to the referendum showed that investors "are relatively unconcerned" about the FTSE 100's globalised firms, says Lex in the FT. Other European indices took a bigger beating last Friday, with Spain and Italy's main indices slipping by 12% and 10% respectively. A pan-European index of banking stocks fell 22% in the two days after the vote.

"The market seems to be pricing in the possibility that European rejectionism will spread to the countries that need unity most," says Lex. There is certainly ample scope for Brexit contagion, agrees Randall Forsyth in Barron's. In France, the head of the right-wing populist Front National, Marine Le Pen, called for a referendum on France's membership of the European Union (EU). Populists in Denmark, Sweden and Italy also want plebiscites, with the latter focused on membership of the single currency. Their case would grow stronger if threats of Brexit's dire consequences for the UK are proved wrong, adds Capital Economics.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.