Weekly Economic Briefings > Eurozone Weekly Economic Briefing > Eurozone

The UK decision to vote for leave deals a seismic body blow to the whole European project. Not only is Europe set to lose its second largest economy, the EU will also lose one of its chief advocates for liberal economic policies. In the short term, the uncertainties created by Thursdays historic vote are huge. These uncertainties are likely to be quickly transmitted to the continent taking the shine off what promised to be a marked recovery in activity in the second half of the year. But the Brexit vote will also inflame existing tensions and fuel a deep seated sense of dissatisfaction with Europes post-financial crisis performance.There are vocal populist movements in many other European countries that will be hugely encouraged by the UK decision to leave. This will create pressure for other countries to have their own referenda, potentially prompting even some Eurozone members to reconsider their future. None of this will be positive for growth, which risks leaving Europe permanently diminished and engaged in a life and death struggle for its survival.