Surprise!

Yes, the “leave” vote surprised me. I expected economic rationality and political equanimity to prevail over distaste for immigrants and flag-waving England firsters. Identity politics has triumphed once again. Let it be a lesson to me.

The immediate economic implications are already clear: a sharp fall in the British pound, a sell-off in stock markets worldwide, an even shakier euro, and more than likely renewed recession in Europe as well as a sharp slowdown elsewhere. The US may be the exception for a while, as many people will seek safe haven in the dollar, but that will drive it up, weaken exports, and slow already slow growth. Uncertainty will persist: Scotland will proceed with a second referendum, Wales may follow suit, and Catalonia will try to do so. Will the Netherlands or France put the EU to a vote?

What about the Balkans and Middle East, where my attention is focused?

In the Balkans, both the immediate and longer term effects are dire. The region is heavily dependent on European trade and investment, which are going to be hit hard right away. But perhaps more important will be the political impact. Balkanites (that’s what I call people who live in the Balkans) have already been finding it hard to believe in their European prospects, which seem farther away than they did five years ago. Now they would be fools not to doubt the willingness of Europe minus UK to accommodate their membership.

These doubts will open the door to increased Russian influence, not only in the Balkans but also in Ukraine. No one gains more politically than Putin does from the UK referendum: it weakens his antagonists in the UK and the EU, makes his annexation of Crimea and occupation of southeastern Ukraine look more acceptable, and validates his ethnic nationalism. The vodka should be flowing freely at the Kremlin today. It will also flow into the Balkans. Putin will no doubt intensify his efforts in Serbia, in Bosnia’s Republika Srpska and in Macedonia to wean Slavs from their EU and NATO dreams.

The Middle East is a harder call. There are a lot of wealthy Gulf sheikhs with money and property in Britain. They won’t like seeing the pound collapse, and some may already be so strapped by low oil prices that they panic and get out. But my guess is that most will hang on. Slowed world economic growth will however crimp oil prices once again, after their recent rise to $50 and change. So the future of Gulf money in Britain is likely dimmer than it was in the past.

Britain’s role in the Middle East may also change. It has been a major European contributor to intervention not only in Iraq but also in Libya and Syria. A more inward-looking and reduced Britain is not going to have the same resources and will to underwrite such efforts.

Britain will of course raise its barriers to Middle Eastern immigrants, but it hasn’t been taking many of them in any event. The main focus of resentment has been against East Europeans and the threat of immigration from the Balkans. Young Albanians, Serbs, Bosniaks and Macedonians are going to lose both education and job opportunities that many have been enjoying in recent years.

Ironically, one of the many problems that need to be resolved during the two-year negotiation to implement Brexit, will be Brits abroad living in the rest of Europe, who number 1.2 million. Three million people from other EU countries live in the UK. If no accommodation is reached to allow these people to stay, we could see a massive population movement with unpredictable implications. Even if they are allowed to stay, this kind of migration is finished. The next British government will have to do everything it can to prevent foreigners from reaching its soon to be diminished shores.

Net net: Brexit is bad news for the UK, the EU, the US, the Balkans and the Middle East. It is good news for Vladimir Putin. My friends and I will not be celebrating.

PS: It took a couple of days, but John Oliver did a great, if pretty gross, explainer: