UK's exit from EU will damage it but won't kill it

A British Union flag flies in front of an EU flag during a pro-EU referendum event at Parliament Square in London, Britain June 19, 2016.  [Photo/Agencies]

The majority of Britons have chosen to leave the EU. The eagerly-anticipated historic referendum outcome will now drag Europe into a damaging political earthquake, the likes of which we have not seen since the bloc's gradual shaping in the aftermath of the Second World War.

As to the extent of the damage, it could be comparable to the upheaval from the financial and sovereignty debt crisis that began in 2008-09. During the intervening years, the European Union successfully prevented the exit of Greece. But this time, it failed to hang on to the UK.

The outcome of the referendum indicates that the UK has refused to accept the terms the European Union offered in February, when it set out to treat the country as a special member of the bloc, which is a grouping of 28 countries and 500 million citizens.

To support this special status, the UK and European Union made compromises that included the UK opting out of the euro currency permanently and not entering into the Schengen Agreement. And it was cleared to maintain contrary practices while other EU members were working toward "closer union".

But the UK wanted to maintain its globally competitive position as a financial center and was unwilling to give up its financial and economic sovereignty to Brussels, which consolidated monetary and financial institutional arrangements in the 19 eurozone countries while dealing with the sovereignty debt crisis.

The European Union has set up a financial firewall and a banking union, which triggered disagreements, to some degree, with the UK, whose currency enjoys equal rights with the euro as a global currency, along with the dollar, yen and renminbi.

Even against such a background, the EU agreed to the principle of "One Union, Two Systems" in differentiating the UK from other members. Friday's announcement of the referendum outcome signaled the failing of the efforts and consultations during the previous year, ever since UK Prime Minister, David Cameron, set out last June his plans for an in/out referendum.

To deal with the situation we find ourselves in today, the leaders of the 28 member states of the European Union will meet on Tuesday and Wednesday. It will be the first important step among many that will be made by the EU and other institutions.

European Council President Donald Tusk, European Parliament President Martin Schulz, Prime Minister of the Netherlands Mark Rutte and European Commission President Jean-Claude Juncker were set to meet on Friday to seek a consensus on how to deal with the issue at next week's summit.

And at the summit, Cameron, who announced on Friday he will stand down as prime minister, is likely to report to the European Council that the UK will need at least two years to finish its exit procedures.

The impact of the exit vote is likely to be far-reaching.

Firstly, it may result in a domino effect among other member states that will look to negotiate special terms with the European Union and may warn that they too will leave the bloc if their needs are not met. Some political forces in the Netherlands have already expressed such intentions and, with political trends in Europe shifting to the right and populists on the rise, such situations could become more common.

Secondly, the question remains as to how the exit will impact the political landscape in the UK and how it will affect the UK's economic and social development.

Thirdly, the way in which the loss of solidarity and confidence in the EU will affect the global financial market and economic growth is unknown. At the very least, based on the lessons learned during the sovereignty debt crisis in recent years, the vicious chain effect of interactions between politicians, the market, the media and the public should be noted.

In a nutshell, Friday's outcome may bring instability to the European Union, at least in the medium term. The international community should prepare countermeasures to cope with such a scenario.

This is reality.

However, people should rest assured that, no matter whether the UK is in or out of the European Union, it will not make a massive difference to the union. It has its borders, its currency and its other advantages.

Right now, the international community should have confidence in the European Union and encourage it. It is a great peace project, even if it does need significant reform.

The writer is deputy chief of China Daily European Bureau.