"Brexit" - What Goldman Thinks Will Happen Next, And Who Will Hold The Next Referendum

Considering Goldman's abysmal forecasting track record continues to plumb new lows (just today it predicted a Spain victory of Italy, and an England victory over Iceland, both tragically wrong), the following should perhaps be best used as an indicator of what will not happen. Still, since there are a lot of remaining Brexit question, we hope that the following at least provides a useful framework for how to approach the :"known unknowns", if not so much the unknown unknown ones.

First, here is Goldman's answer on what happens next, in terms of timeline of key events, as well as bookmaker odds for the next conservative party leader.

Some points from Goldman here:

  • In the case of multiple candidates, Conservative Members of Parliament will choose a shortlist of two names for party leader. The winner will then be determined by a postal ballot of the wider members of the party.
  • According to Adam Posen, President of the Peterson Institute for International Economics, “there’s a reasonable case to be made that this should go to an election given that the prime minister resigned.”
  • More than 3 million people in the UK have signed a petition calling for a second EU referendum.
  • Over the next several weeks, leaders across the continent will assemble to address the political implications for the UK and the EU more broadly.

* * *

The next question: how will Scotland and Northern Ireland react. It shows the following chart as evidence of the pro-EU sentiment in these two states.

“A second referendum must be on the table. And it is on the table.”

     – Scottish First Minister Nicola Sturgeon, June 24, 2016

“Scottish First Minister Nicola Sturgeon … threatened to block Britain’s exit from the EU, arguing that such a decision would need the consent of Scotland’s semiautonomous Parliament.”

     – The Wall Street Journal, June 27, 2016

“This outcome tonight dramatically changes the political landscape here in the north of Ireland, and we will be intensifying our case for the calling of a border poll.”

     – Sinn Féin Chairman Declan Kearney, June 24, 2016

On the other hand, as we reported earlier, a new poll has found that the majority in Scotland is against independence with more people (45%) saying Scotland should not conduct a second referendum, than those who said it should (42%).

* * *

Goldman then shows the split within the EU, with those on one side who are urging for a quick separation (Juncker, Hollande), and those who want a slow departure (Merkel, Cameron, Johnson). Merkel is winning.

* * *

Goldman's final question: is there risk of more referenda across the EU. The answer: a resounding yes, as can be seen in the table below.


“The UK has just initiated a movement that will not stop.”

      – National Front Leader Marine Le Pen, June 24, 2016


“Hurrah for the British! Now it’s our turn. Time for a Dutch referendum! #ByeByeEU”

      – Dutch Freedom Party Leader Geert Wilders, June 24, 2016


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