Franc strengthens as Britain votes to leave the EU

Britain has entered uncharted waters after voting to leave the European Union. The pound has suffered one of its biggest one-day falls in history and the Swiss foreign ministry has set up a helpline for conceed Swiss citizens and businesses.

The decision raises the likelihood of years of negotiations over trade, business and political links with what will become a 27-nation bloc. In essence, the vote marks the start – rather than the end – of a process that could take decades to unwind.

In the final result, the “leave” side won 51.89% of the vote and the “remain” side 48.11%.

“Thanks to this reclaiming of sovereignty, [Britain] can take back control over immigration and simultaneously make use of economic opportunities in the world outside the EU,” the Neue Zürcher Zeitung said on Friday.

“Whether such melodic promises from the Brexit supporters will prove to be of substance or tu out to be just an illusion remains to be seen. Whatever happens, what must be avoided is that a post-Brexit Britain becomes an introverted country in self-elected isolation.”

It added: “For the EU, the decision could hardly come at a worse time after the euro and refugee crises. ... The Swiss will also feel the effect [of the Brexit] as their ongoing negotiations now face a blockade, as Brussels now has very different conces.”

Stefanie Walter, professor for Inteational Relations and Political Economy at Zurich University, tweeted:

The pound plummeted more than 10% in six hours, from about $1.50 to below $1.35, on conce that severing ties with the single market will hurt the British economy and undermine London’s position as a global financial centre.

Currency turbulence

The result has also driven investors to the safe-haven Swiss franc, which firmed against the pound. The franc also gained against the euro, which fell to CHF1.0685, its lowest since August. The Swiss currency had already strengthened in the weeks ruing up to the vote.

The Swiss National Bank wants to prevent a flight to the franc, with bank president Thomas Jordan aouncing an intervention – if necessary lowering interest rates – should Brexit trigger turbulence on the currency markets.

An SNB spokesman said on Friday moing the bank would not comment until a final result was declared.

Helpline

The Swiss foreign ministry aounced a helpline had been set up for Swiss citizens and businesses wanting to know what Brexit could mean for them.

“The current regulations regarding Swiss citizens and companies will remain valid for the time being and nothing will change immediately,” the ministry said in a statement on Friday. “There is, however, a high level of demand for information from Swiss citizens in Switzerland and abroad.”

In Switzerland the number to call is 0800 247 365. Calls are free of charge. If calling from abroad, dial 0041 800 247 365. Calls from outside Switzerland incur a charge.

Divided nation

As results poured in, a picture emerged of a sharply divided nation. Strong pro-EU votes in the economic and cultural powerhouse of London and semi-autonomous Scotland were countered by sweeping anti-Establishment sentiment for an exit across the rest of England, from southe seaside towns to rust-belt former industrial powerhouses in the north.

Scottish leader Nicola Sturgeon said her country had cast an “unequivocal” vote to remain in the European Union – all 32 voting areas in Scotland voted to remain – a result that raises the spectre of a new referendum on Scottish independence.

“The vote here makes clear that the people of Scotland see their future as part of the European Union,” she said.

Years of negotiations

With the result in favour of an EU exit, Britain becomes the first major country to decide to leave the bloc, which evolved in the ashes of the Second World War as European leaders sought to build links and avert future hostility. Authorities ranging from the Inteational Monetary Fund to the US Federal Reserve and Bank of England waed a British exit would reverberate through a world economy that is only slowly recovering from the global economic crisis.

The result triggers a new series of negotiations that is expected to last at least two years as Britain and the EU search for a way to separate economies that have become intertwined since Britain joined the bloc on January 1, 1973. Until those talks are completed, Britain will remain a member of the EU.

Viviane Reding, the former European Commissioner for Justice and Consumers, tweeted:

The European Union is the world’s biggest economy and Britain’s most important trading partner, accounting for 45% of exports and 53% of imports.

Stay with swissinfo.ch for more reaction from Switzerland.

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