The Battle of Britain

The earthquake that hit Europe overnight measured 10 on the Richter scale. The epicenter: Britain.

It is too early to assess the damage, although the quake was clearly felt in politics and in capital markets everywhere. One casualty was Prime Minister David Cameron, who said he would step down in October. He will soon start job hunting.

That Britons voted to leave the European Union is nothing short of stunning, but the sentiment was there all along. The pollsters did not see this one coming, definitely not in the final days of the campaign. The "remain" camp -- and their sympathizers in continental Europe -- failed to read the tea leaves. They failed to discern the comeback of nationalism. They failed to pick up the mood in Britain, where people are sick and tired of giving their tax money to bureaucrats in Brussels who tell them how to live their lives. It just didn't make sense for the average citizen. With all due respect to the EU's large free trade zone in Europe, the average guy just wants sovereignty.

A case in point are the regulations Brussels imposed on the meat industry. The citizens of the U.K. like their sausages with a lot of fat and flour. But EU regulators said they must contain 100% beef. It appears, then, that before deciding to cast their ballots, people also considered their culinary preferences.

And of course, there is the rising tide of immigrants. Every European is genuinely concerned over this matter, and voters on Thursday made it clear they were worried over the quotas the U.K. might have to abide by if it continued being in the EU.

Over the past 15 to 20 years, Europe has not functioned well, and it could not provide good explanations for this malaise. There was a disconnect between the EU and its member states. On top of that, governments failed to assert themselves, resulting in growing discontent. As a result of the vote, others will likely try to emulate Britain. The far-Right in France, led by Marine Le Pen, has already begun pushing for a similar referendum in France.

Cameron agreed to hold this referendum because he wanted to placate the ultra-conservatives on the Right. Now that he has lost this gamble, he should set Monday as his last day in office. Why wait until October? In any event, his departure brings former London Mayor Boris Johnson (a rival of Cameron's in the Conservative Party and leader of the "leave" camp) increasingly close to 10 Downing Street. He may wake up one day in the not so distant future, and find out that he is prime minister.

Europe is not just about having Eurocrats running the show from Brussels. It is also about stability and progress, which should not be put to the test through a referendum.

In the short run, an economic downturn can be expected. But after that, the British people will try to capitalize on the extensive clout their banking industry has on the world markets. Britain might be another Switzerland in that sense.

Politically speaking, this might be the beginning of the end of the European dream. And finally, it turns out that U.S. President Barack Obama once again failed (remember his meddling when he visited the U.K.-). He tried really hard to fight this, but Brexit prevailed.

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