Potential Brexit impact at least two years away

Rochester Business Journal
JULY 22, 2016
Mark Armbruster
On Investing

The year 1993 was a pivotal one in the entertainment world. The TV show “Friends” began filming that year and soon became a runaway success. The show launched Jennifer Aniston into mega-celebrity status. Because of her newfound fame, she came into contact with other A-list celebrities, and ultimately she married Brad Pitt.

Their wedding was a pop culture phenomenon: Brad and Jen became known in the media as “Brennifer.” Even though their marriage didn’t survive, the public’s obsession with them continued. Brad continued to hold the spotlight when he found a new romantic life as “Brangelina.” While it took Jen longer to find her next spouse, a recent trip through the checkout aisle at the grocery store assured me that she is happily married today.

Just as the filming of “Friends” was the catalyst for numerous subsequent events that would alter the course of peoples’ lives, 1993 was also notable for the signing of the Maastricht Treaty, which formed the European Union. This too would set into motion a number of events that many consider important.

The formation of the EU was a polygamous marriage among six original member states that included a common currency, limitations on allowable government debt, inflation targets and free movement across borders. This was a landmark agreement that many hailed as an important step toward globalization and its associated economic benefits. The EU has since grown to include 28 member states.

However, with a recent referendum, the EU is likely to be one member shy in the not-too-distant future. Great Britain’s citizenry has decided that any benefits of EU membership are outweighed by a loss of sovereignty and voted to exit the political union, the so-called Brexit.

It may seem a frivolous metaphor to compare Brennifer with the Brexit. After all, a breakup in the EU, we’re told, could have calamitous political and economic implications. Indeed, even Alan Greenspan has called the Brexit vote the “worst period I recall since I’ve been in public service.”