Brexit poses serious political ramifications for the rest of the EU

It is not obvious if the EU would lose or gain from a Brexit, writes Lorenzo Codogno. Judging from trade and investment flows, the divorce should have less of a negative impact on the rest of EU than on the UK. Some service sector businesses could potentially relocate to the EU, and the area could divert foreign direct investment from the UK. Financial market volatility, uncertainty, and loss of confidence in the EU project could pose a more immediate and severe risk. Moreover, there is a threat of serious political ramifications and a domino effect for the rest of the EU. A Brexit would bolster anti-Euro populist opposition parties, with potentially destabilising effects for the EU and the Euro Area.