«They say things are happening at the border, but nobody knows which border» (Mark Strand)
by Mirella Pellegrini
Abstract: This Article mainly analyses the impact of the “leave” success on the economic stability and, more in particular, on the European Financial System.
Starting from a brief overview of the results of the British referendum and of the reasons that may have induced the UK population to vote “leave”, this paper focuses on the economic and financial relationships within the European Union deriving from the exit of the UK, examining, among others, the scope of Art. 50 of the TEU and the negative implications on the overall balances of any Member State, and observing that we are in presence of an empirical representation of the horizontal Euro-scepticism – characterized by conflicts and diatribes among the populations of the Member States of the Union – that is different from the old vertical Euro-scepticism (i.e. “against Brussels”).
Then, this Article explores the specific consequences of Brexit on the European Financial System, analysing its impact on the European regulation applicable to the United Kingdom until the official “exit” as well as the impact of such “exit” on the European legal framework in this field.
The last part of this paper takes into account certain effects that Brexit could produce in the Italian financial market – such as those concerning the stability of the Italian stock exchange, potentially affected by this situation – and, more in general, on the negotiations among the Members States and the UK, concluding that in the overall evaluation of the problem hereby examined it is always possible to find positive aspects, referable, for example, to the absence of a disaggregating presence in the Europeanization process, in which many citizens of the “old continent” still believe in.
Summary: 1. June 23rd, 2016: an historical date for the EU. – 2. The “leave” success: implications for economic stability. – 3. Continued: specific consequences on the European Financial System.
1. Just a few weeks away from the British referendum, the analysis of the reasons that may have induced the UK population to vote “leave” allows us to draw up further considerations on the consequences that this choice can entail globally.
It has been widely highlighted that the UK population (especially those living in the outskirts) has abandoned the traditional pragmatic orientation that would have led us to presume a different result in the elections. This change, compared to the expected behaviour, should be placed within the transformed cultural and historic context in which the decision of that population was taken, imposing the research for motivations within the growing (and increasing) discontent towards a political class far from reality and from the needs of the “sovereign” population.
Only after this acknowledgement – the results of which are valid for the entire European population and must inevitably be reconnected to fear, caused by episodes that could affect anyone – it is possible to draw up more specific evaluations concerning the peculiarities that have always marked the behaviour of the British population; I am referring to the little understanding (due to political and economic reasons, but certainly also social and cultural) for the Countries of the Old Continent, which – in addition to the negative impact on the integration process with the other EU states – resulted into an open and incontrovertible aversion to the preservation of tight contacts with the EU.
The United Kingdom, in fact seems to be oriented to maintain only exchange contacts and economic-financial connections with the Union, deriving from the adhesion to the common market. In this logic, from several parties it has been highlighted the possibility/will to execute agreements similar to those existing between Norway and the other states which are not part of the European Union, but which have agreed to the “Europen Economic Area”; these agreements, that guarantee equal rights and duties in relation to different subjects (such as, for example, the free circulation of goods, capitals, services and people, education, social affairs, consumer protection, competition etc.), and that, furthermore, do not “affect” other aspects extremely relevant and strongly important nowadays (such as: economic policy, foreign policy and that for common security).
Actually, an agreement between the European Union and Great Britain cannot avoid certain reflections on the matter. Firstly, from a factual point of view, certainly, there are several implications – for the European Institutions and the other member States – to the “exit” from the EU (albeit decided by a State which was part of the union as not fully consistent to the standards) than those caused by a “non entry” in the Union itself (also for popular will and for reasons apparently different than the UK ones); secondly, without diminishing the participation of the states adhering in the EEA (European Economic Agreement), we shall consider the economic, political and social weight of Great Britain, juncture of interests and that brings to Europe some of the biggest overseas economic powers, especially in the financial sector.
From another point of view, before the analysis of the peculiar effects of the leave, we may not overlook a brief reference to the political-juridical aspects of the referendum in question and, in particular, to its expressive function of the popular sovereignty.
We are referring, in particular, to the possibility – represented by the specialist press – to exclude a binding value of the result of the vote, expressed by the majority of the electors. This scenario, clearly, shall not be referred to the verification of the democratic legitimacy at the basis of the vote, which must be considered fully valid under this perspective, hence the necessity to accept the results. What comes to mind here is that, instead, the possibility of interventions of the UK politics, that somehow may nullify these results that set a fundamental change in Great Britain’s history. Therefore, possible paths aiming at finding, in the implications of the British parliamentarism, adequate mechanisms to defuse this decision taken by the population, have been pointed out. This with the consequence of changing substantially the democratic ratio, albeit not distorting, on a formal level, the picture of an intervention consistent with the popular will.
There is no doubt that an equivocal interpretation of the provision of art. 50 TEU could favour such an orientation, possibly by postposing the notification terms of the referendum result, or by transferring to the parliament a necessary preliminary validation power of the popular vote. The absence in the United Kingdom of a law that, from a general point of view, provides the modalities in which a referendum vote should be carried out could be interpreted – in this eventuality – as an easy escape from the result of the referendum.
Economic reasons could support the abovementioned intervention: from the intent to preserve the London’s City as the most important financial centre in Europe, up to maintain the privileged status obtained by Cameron with the recent agreements of February 2016 in which Great Britain was granted with broad concessions that include the symbolic “declaration” that that Country will no longer be part of a Union “increasingly tighter” and several facilitations (among which, the possibility to limit the subsidies for the Community immigrants has a specific importance); agreements immediately suspended by the European Commission following Brexit[
As a counterweight of eventual attempts of the politics (still not identified) aiming at stalling the status quo, it is considered that these orientations are absurd and, therefore, should be excluded from a juridical ratio and from fair cooperation rules on which modern States should base their action. This does not exclude that, on a concrete level, it appears to be likely that in the future UK might outline interventions aiming at preserving, also in the occasion of a formal exit from the Union, the prerogatives and the benefits that, over time, Great Britain has obtained from the latter, without, therefore, facing the burdens.
2. Given this picture, which shall be acknowledged, we should try to deepen the analysis on the possible negative implications deriving from Brexit on the overall balances of the single Member States and, more in general, on the continuity of the European Union itself jeopardized by the prevalence of populist tendencies activated by the “plague” of the Britannic case.
In this premise, it is considered appropriate to focus the attention on the relationship between the event under examination and the previous crisis situation that – as it known – in the past 10 years has slowed down the economic growth process in many European Countries. In other words, a first question to which we must answer involves the connection of the causes of Brexit with the dysfunctions today existing, at global level, in the financial and economic sector.
The significant negative consequences that in the days following the “leave” have characterized the performance of the stock exchange index of the main Cities of the world (from Tokyo to Milan passing by Berlin, Paris and London itself) could lead us to hypothesize the existence of a tight relation between Brexit and the economic stability perspectives of the countries that relate with the UK. In other words, it appears to be that the “leave” choice has marked a setback (in the start of the fragile economic recovery spotted in many EU countries) connected to the loss of a significant partner, who’s presence appears to be suddenly particularly important in the general systemic frame of the Union.
Although, an affirmative response to these questions appears to be little convincing when it comes to some specificities of the relationship between Great Britain and The European Union. This because the real cause of the aforementioned criticalities that affected financial markets (and, among these, mainly those of some EU Countries) must be found essentially in the elements of a speculation (sad reality of the capitalist world) always waiting to strike.
Continuing, then, with the analysis of the relationship between the UK and the European Union, as mentioned above, we must take into consideration that Great Britain has never had an intense participative role within the European Union. Proof of this fact, on one hand, it is UK’s reluctance on accepting the integration process started with ECSC (European Coal and Steel Community) first, and then with Euratom and EEC; on the other hand, the failure to join the Maastricht Treaty, and, recently, the European Banking Union. This regardless of the further consideration that its political interventions have always aimed at containing (rather than facilitating) the development of the European economic integration process. In this perspective, it has been significant its orientation aiming at easing the adherence of extra communitarian Countries within the European Community; with the result of preventing (or at least deferring) the realization of a federal construction, as intended by the founding fathers of Europe and as, it could have been implemented with a different and more intense application of the functional method wanted by Jean Monnet.
Since, it is not correct to consider the results of the British referendum as a cause of a sudden crisis for the possibilities of the EU growing. Truthfully, if on this concern new problems are identified, these are caused by the incapability of reaction of the Union’s Governments, which – due to the known political dis-functions within Europe – is not capable to promptly elaborate ideal solutions to overcome traditional difficulties, accentuate, in the short term, by the results of the referendum.
It’s also important to point out that, from the analysis of the vote expressed on June 23rd, it appears the lack of a necessary social cohesion between the British population and that of the other Member States, considering that the supporters of the “leave” have been those that tried to stop the migration process of the citizens of the Union. Here, we are also in presence of an empirical representation of the horizontal Euro-scepticism that is different from the old vertical Euro-scepticism (i.e. “against Brussels”), being – the first – characterized by conflicts and diatribes among the populations of the Member States of the Union (for example: the populations from north, that attack the “lazy southern Europeans”, the people from the south that attack “the selfish northern Europeans”, etc.), and from the classical nationalism that arise conflicts only because it is linked to the common belonging to the European Union.
This might be one of the aspects that should be taken into account more than other: over and above the British situation, clearly on the margins of communitarian integration, the same lack at political and social level is also found in many other European countries. The walls that Austria and Hungary have recently built to slow down immigrations of people escaping from war, from poverty, from death, are a clear expression of this reality; they show that the lack of incisive cohesion policies, together with the enforcement of inflexible austerity policies, not only caused serious repercussion on competitiveness and on the growth of the productive systems, but have also marked the limits of a convergence that (unfortunately) remained only in the indications of the European legislation, without being translated into a concrete form of solidarity and sharing.
3. In the end, our study should focus on the specific consequences of Brexit on the European Financial System.
For that concerning the applicability of the European regulation, it should be taken into consideration that the latter will continue to apply to the United Kingdom until the official “exit”; where it is difficult to foresee the impact that this “exit” could have on European reality. On this subjects it could be appropriate to consider that from a country so “dependent” by the financial markets and from the banking business, it should be normal to expect – in a “continuity” perspective – an “homogeneous” application of the contents of the European regulation also following its exit from the EU, or – in a “breaking” perspective – the introduction of specific provision that increase its appeal for the investors (e.g. aggressive fiscal policy) not to lose significant market shares. In this perspective it appears to be necessary to specify that, in the past Great Britain, in the application of the banking regulation, has not always been fully compliant with the European provisions, proving that its interest was in keeping unaltered the characteristics of its internal market, in a primary perspective of competitive equality with the US market (that more than the ones of the other European countries threatens the British financial power).
In this regard, the expectation of a priority interest for those part of the EU financial sector to proceed without further delay to the completion of the Banking Union; even if paradoxically it could appear that the post-Brexit consequences could be more “significant” in the context of continental Europe than in the UK (as it has been highlighted by the recent studies of the Monetary Fund and of the ECB). According to us, this assumption does not signify the essentiality that could be given to it; without prejudice for the opportunity to apply within the ESFS (European System of Financial Supervisors) the necessary changes to conform its configuration to the new reality created by Brexit. We are referring, in particular, to the move of the headquarters of the EBA to another Member State, with obvious implications for organizational and structural choices (for which our country is also interested).
The necessity to not ascribe to the leave an importance that should have peculiar repercussions within the banking-financial sector derives, also, from the aforementioned consideration regarding the marginal role always played by the United Kingdom (which “called itself out” from interventions aiming at empowering its economic integration with the EU), maybe pushed by the will to not lose that “revenue” coming from the position held thanks to the know-how in the sector and of the capitalization of its enterprises, notably higher than European average. On the other side, the empowerment of the European financial industry to be carried out through future implementations (MiFID 2, Capital Markets, Union, etc.) could now be considered launched on an independent path not apparently significantly affected by the new reality determined following the June 23rd vote.
That said, it should not be omitted the significant consequence that Brexit could have over the management of the stock markets (and, for that concerning out Country, the market of Milan). Therefore it comes into consideration the merger between the London and the Frankfurt stock exchanges (voted by the partners of London Stock Exchange on July 4th 2016 with a 99,92% result), nonetheless the relationships between the Italian Stock Exchange and the LSE; we are in front of a complex situation in which the exit strategies of the LSE shall be agreed with the competent national supervisory authorities. Therefore, the communication sent by the President of the Consob (National Commission for Companies and the Stock Exchange) to the head offices of the LSE does not come as a surprise; this letter requests specifically that every strategic initiative of the London Stock Exchange Group, that concerns the activities and the efficiency of the markets and the post trading structures of the Italian Stock Exchange, should be previously decided in cooperation with Consob, to first evaluate the possible consequences upon the activities (of systemic relevance) of the Italian Stock Exchange itself.
Following Brexit it could be foreseen an intensification of the negotiations between the Members States and the UK (negotiations attributable to the legislative indications of the mentioned art. 50 TEU). These negotiations may favour the German Stock Exchange that, as it is known, holds the majority quote (54,4%) in the stock consistencies of the market entities in question. It is obvious that, in this context, a recovery of the standing may be carried out even by our Country, as to upgrade the co-starring role with France and Germany in the decision making processes within the EU; reason why in the overall evaluation of the problem hereby examined, it is always possible to individuate positive aspects (referable, therefore, to the absence of a disaggregating presence in the Europeanization process, in which many citizens of the “old continent” still believe in).
 On the numbers of the referendum that may help to understand the reasons at the basis of the choice to exit from the European Union, see. http://www.eunews.it/2016/06/24/brexit-tutti-numeri-del-voto-infografica/62528. The interesting data concern for example the fact that: a) Londoners majorly voted “remain”, because of the strong interconnection of the British capital city with Europe in comparison to the peripheral areas, which perceived less the effects of the relationships with other countries and the benefits of the Union and that chose the “leave” option; b) the higher the age group of the population, the higher is the percentage of people who voted “leave” (that is people that, in perspective, will have to live for less time with the decision to exit the European Union). See. EU Referendum: the result in maps and charts, consultable on http://www.bbc.com/news/uk-politics-36616028; EU referendum: How the results compare to the UK’s educated, old and immigrant populations, consultable on http://www.telegraph.co.uk/news/2016/06/24/eu-referendum-how-the-results-compare-to-the-uks-educated-old-an; Who voted for Brexit? How the EU referendum divided generations and social classes, consultable on http://www.mirror.co.uk/news/uk-news/who-voted-brexit-how-eu-8277077. See also: Survey results. Our data suggests they did, 11th July 2016, consultable on http://www.ourinsight.opinium.co.uk.
 See, among others, NAPOLITANO G., Brexit e spinta al cambiamento, on IlSole24Ore, July 7th, 2016.
 I am referring to the climate of fear that, following the Nice massacre, pushes to the closure of people, in a diffident spiral that can assume different forms and can be expressed in different ways (as, for example, the expression of a vote in favour of the exit from the European Union). V. SCUTO. Le democrazie europee perderanno l’innocenza, interview D. Grossman, Repubblica.it, July 16th 2016.
 In this sense both Cameron, before the vote (see. Brexit/ Referendum Unione Europea, Cameron, Il risultato va accettato, restiamo uniti, on http://www.ilsussidiario.net/News/Politica/2016/6/27/Brexit-Referendum-Inghilterra-Unione-Europea-il-trucco-di-Cameron-e-bufera-in-Ue-conseguenze-Gran-Bretagna-27-giugno-2016), and Theresa May, after her election as new british prime minister (Brexit, ministro May: Volontà popolare va rispettata. Un secondo referendum non è un’opzione, on ilvelino.it June 30th, 2016); also, following a strong pressure from the main European forces for a tidy but propt exit of the United Kingdom (see. among others: MAISANO, E ora la Ue deve pretendere scelte rapide, on the IlSole24Ore of the July 14th, 2016), the UK headquarters seem to be taking their time, declaring that the implementation of art. 50 TEU shall be realized not earlier than at the end of the year.
 These are Norway, Lichtenstein and Island, which together with Switzerland (that signed bilateral agreements with Europe) are part of the Economic Free Trade Association (EFTA).
 Among the main reasons that politically support the non-entry of Norway, for example, we may find the need to maintain the undisputed sovereignty on the fishing market, which represents one of the main pillars of Norway’s economy. In contrast with that, we can observe how the UK has benefited, inter alia, from the European agricultural policy and could, then, witness a reversion, mainly at lower levels.
 See numerous articles and dossiers from the Financial Times, among which: MUNCHAU, How to make Brexit manageable, 7th July 2016; Article 50: The Brexit divorce paper, Financial Times, 20th July 2016; The Brexit divorce paper, Financial Times, 21st July 2016; GILES – TETLOW – CADMAN, Brexit barometer: economic mood darkens, Financial Times, 21st July 2016; PARKS, Brexit: perché la UE se l’è cercata, published by eunews, 15th July 2016, consultable on http://www.eunews.it/2016/07/15/brexit-perche-la-ue-se-le-cercata/64585
 On the result of the vote as a peculiar product of the democratic method see, in general, above all traditional thoughts by FERRARI, Elezioni (teoria generale), from Enc. Dir., XIV, Milan, 1965, the recent study by RUBECHI, Il diritto di voto. Profili costituzionali e prospettive evolutive, Padua, 2016.
 On the “democratic disconnection” within the European Union, see LUPO, Parlamenti e Governi nella Costituzione “composita” dell’Unione Europea, in PELLEGRINI (edited by), Corso di diritto pubblico dell’economia, Padua, 2016, p. 143 ff., and there broad bibliography.
 See PRIMO DI NICOLA, La Brexit non vincolante. Il documento choc che può bloccare il referendum, consultable on www.tiscali.it, 28th June 2016; 11° Report 2015-16 of the European Commission, The process of withdrawing from the European Union, published by the House of Lords (paper 138), see note 13.
 On art. 50 TEU see, ex multis, FRIEL, Secession From the European Union: Checking Out of the Proverbial “Cockroach Motel”, in Fordham International Law Journal, 2004, Vol. 27, 590 ff.; Louis, Le droit de retrait de l’Union européenne, in Cahiers de droit europeén, 2006, 3–4, 297 ff.; Forwood, Interesting Times for the UK Relationships with the EU, in Cambridge Yearbook of European Legal Studies, Vol. 15, 2012-2013, 92 ff.; J. De Miguel Barcena, La cuestion de la secesion en la Union europea: una vision constitucional, in Revista de Estudios Políticos, julio-septiembre 2014, 211 ff.; Puglia, Art. 50 TUE, in Tizzano (edited by), Trattati dell’Unione europea, Milan, 2014, 339 ff.; Savastano, Prime osservazioni sul diritto di recedere dall’Unione europea, in Federalismi, 2015, 25th November 2015. With specific reference to this matter see Caravita, Brexit: Keep calm and apply the European Constitution, in federalismi.it, n. 13, 29th June 2016, 2 ff.; Curti Gialdino, Oltre la Brexit: brevi note sulle implicazioni giuridiche e politiche per il futuro prossimo dell’Unione europea, in federalismi.it, n. 13, 29th June 2016, 2 ff.; Savastano, Brexit: un’analisi del voto, in federalismi.it, n. 13, 29th June 2016, 2 ff.
In this regard, the thoughts regarding the more complex exit procedure from the EMU shall be considered; see O BROIN, The Euro Crisis: Orderly Default or Euro Exit?, in IIEA Working Paper 8, The Institute of International and European Affairs, Dublin, 2012; DE GRAUWE, E se la Brexit facesse bene all’Unione?, in Lavoce.info, 26th February 2016; ATHANASSIOU, Withdrawal and expulsion from the EU and EMU, in Legal Working Paper Series No. 10, European Central Bank, 2009; BOOTLE, Leaving the euro: a practical guide, Capital Economics, London. 2012; HOFMEISTER, Goodbye Euro: Legal Aspects of Withdrawal from Eurozone, in Columbia Journal of European Law, Vol. 18, 2011.
 On this matter it is appropriate to point out that the procedure of art. 50 TEU starts only from the express request of the withdrawing Country and cannot be activated by the institutions of the Union. The initiative of the withdrawing Country implies a notification of the intention to leave to the European Council, after that a negotiation starts – according to the “guidelines set by the European Council” – (the political European dominus of the withdrawal process cfr. CARAVITA, Keep calm and apply the European Constitution, cit.) -, between the European Union and United Kingdom on the “withdrawing terms”. The negotiation involves the four main institutions of the European Union: the European Council sets the “guidelines” that the Commission must follow as negotiator of the agreement, that is then settled by the Council, after the approval by the Parliament. (see TOSATO, Brexit, Dal referendum al recesso, on apertacontrada.it, 30th June 2016). Furthermore, the representative of the withdrawing Member State does not participate to the resolutions and decisions of the European Council and of the Council even if until its exit from the Union, the United Kingdom is subject to all the rules and procedures of the EU. Successively it is subject to the provisions of the withdrawing agreement; in absence, the general principles of law apply. Concerning the future relationships with the Union, and the commercial ones, if not agreed, fall under the ordinary regime of the WTO.; Impullitti, Dalla Brexit un conto salato per il commercio britannico, in Lavoce.info, 28th June 2016.
 On this matter, see – among all other public documents – the Library Note published before the referendum by the House of Lords, focusing on the role of the British Parliament within the withdrawing procedure (Leaving the EU: Parliament’s Role in the Process) and the Briefing Paper of the House of Commons entitled Brexit: What Happens Next?. These documents demonstrate how the British government is not legally bound to respect the results of the referendum, considering its advisory nature. On the problem (not widely studied) of the relationship report on the debate Referendum e democrazia parlamentare, LUISS CESP, Rome, 21st July 2016.
 These agreements consist in the “proof of the difficulties encountered by the EU in facing the logics of the economic convenience placed by the UK at the base of its adhesion (and of the participative modalities) to the project of the founding fathers of the Community”, clearly not characterized on valuable motivations (cohesion and solidarity). See. CAPRIGLIONE, Brexit: un divorzio antistorico che può cambiare l’UE, on apertacontrada.it of the 5th July 2016, p.2.
 See, CAPRIGLIONE, Brexit: un divorzio antistorico che può cambiare l’UE, in which he recalls the Conclusions of the European Council from which it is understood that the 28 member States have unanimously convened that, in case of a result in favour of the exit, the Agreement in question would have terminated to exist; same thoughts by TOSATO, Brexit, Dal referendum al recesso, cit., who in reference to the UK-EU Agreement of the 19th February 2016, considers that the termination of the effects deriving from this agreement would be an “automatic consequence”, not connected to particular formalities; this is a justified conclusion, according to the Author, since this Agreement was carried out to favour a positive result of the referendum (where a (further) “concession” to Cameron’s Government “to overcome the obstacle of popular consultation” was envisaged). Since the exceptions provided in this agreement had been exceptionally agreed in view of a very special occasion, and have definitely been overcome by the result of the referendum.
 See NAPOLITANO GIULIO, Brexit e la spinta al cambiamento, from IlSole24Ore, 7th July 2016, according to which, even though it appears doubtful that “in the English referendary campaign and in the favourable orientation towards Britain’s exit from the European Union, (…) rejection reactions (…) influenced the choice due to an indiscriminate opening to the growing migratory flow and the persistent Eurozone Crisis”, it is important to stress that “the pro-Brexit electors wanted to express their protest towards the national government policies responsible of the worsening of the essential component of populism. Protest that, according to Napolitano, appears passed, considered that “the leaders of the Exit from Europe were certainly themselves exponents of the establishment in a society historically characterized by strong classist divisions. See also De Fraja, Post-Brexit: regna l’incertezza, in Lavoce.info, 05th July 2016.
 Among the analysis on the reasons of a possible new shock, mainly connected to BRRD and DGSD, see MICOSSI, Eurozone Stability Still Under The Threat of a “Bad Shock”, consultable on http://www.assonime.it//AssonimeWeb2/servletDocAllegati?idSelectedDocument=267146&idSelectedDocumentType=2266&idSelectedAttach=267147&reserved=false; ZINGALES, The Real Lesson From Brexit, on Pro Market, University of Chicago, Booth School of business, 29th June 2016.
 As it is well known, among the most significant events of the period immediately following the result of the referendum, we should recall the following: 3000 bln dollars were “burnt” in stock capitalization. Measures were taken with store of values (gold and USA government bonds); the British pound lost more than 11% at $1.3229 against the US Dollar, the lowest rate since 1985; Dow Jones burned over 600 points, the worst result since last August; the Yen skyrocketed against the US Dollar, reaching 99.02 yens per dollar, the first time below 100 since 2013; FTSE 100 lost up to 8,7%, the worse loss since 2008; European stock exchanges lost an average of 7% in a downfall second only the great financial crisis; the price of gold rose 8.1% to $1,358.54 per ounce and doubled its average volume; the performance of the 10 year US treasuries collapsed at a 1.40% pace; the price of petrol loses 6.8% to $46.70 per gallon. On this subjects see: PROVENZANI, È Brexit: borse bruciano $2.000 miliardi, sterlina crolla. È una giornata storica, on www.forexinfo.it, of the 25th June 2016. That without counting the consequences on a strictly national level like the loss of liquidity, already scarce, of the Italian bonds. See, on this matter, MONTI MARA, Il post Brexit peggiora la liquidità per i bond, on IlSole24Ore from the 8th July 2016. It should also be remembered that the day following Britain’s decision to exit the Union (24th June 2016) all the main European Stock Exchanges collapsed rapidly: Athens (-13.42%), Milan (-12.35%), Paris (-8.04%), Frankfurt (-6.82%); “ironically” London had the best market with a loss of only -3.15%. Remarkable that the financial markets on the day of the vote were positive; this data is proof that the markets were confident on the results being “Remain” then translated into Leave. The unexpected decision generated panic among the investors, producing such significant losses. On this matter see. DI CRISTOFORO – MAURINO, Venerdi nero in Borsa, in fumo 411 miliardi dopo Brexit. Per Milano la peggiore seduta di sempre, on IlSole24Ore from the 24th June 2016.
 The United Kingdom not only did not accept to be part of the original group of the founding countries (even though with the Brussels Treaty in 1948 it had relationships with France and the Benelux Countries) but also promoted the creation of the European Free Trade Agreement, that in an important way appears as an International organization cleared from any desire for a federal integration and that presented itself as an alternative and in competition with the European Community itself. See. OLIVI, L’Europa difficile: storia politica dell’integrazione europea, 1948-1998. Bologna, 1998.
 See. CAPRIGLIONE – SACCO GINEVRI, Politics and Finance in the European Union, Wolters Kluver, 2016, p. 209 ff; accordingly FABBRINI, La visione integrale contro il rischio di disintegrazione, on IlSole24Ore from the 13th July 2016.
 On the study of the functionalist method and also in its neo-functionalist implementation both in the international organization and then in the European Union, see in particular HAAS, The Uniting of Europe – Political, Social and economic Forces, 1950-1957, London, 1958; ID., Beyond the Nation State, London, 1964; LINDBERG, The Political Dynamics of European Economic Integration, London 1963. For a close examination on the different interpretative theories of the European integration process see ROSAMOND, Theories of European integration. New York: St. Martin’s Press, 2000.
The question of a lack of real and true Union government has been investigated by numerous authors and research centres. In Italy there is the “Governing Europe” research project carried out together by the International Affairs Institute and the Study Center on Federalism in order to study the institutional architecture of the European Union (EU) and the different decisional procedures that characterize its policies pose different questions on the existence of a Union government and its nature. The project has analysed the current structure of the governance system of the EU in its different political environments and in linked subjects: (1) sovranationalism and intergovernamentalism; (2) representation and democracy; (3) the challenge of the differentiated integration; (4) the economic governance; (5) Europe in the World. – See http://www.iai.it/it/ricerche/governing-europe.
 See. CAPRIGLIONE – SACCO GINEVRI, Politics and Finance in the European Union, cit. passim.
 See among others BORDIGNON, L’Unione Europea dopo la Brexit, on lavoce.info.it from the 19th July 2016.
 See. CAPRIGLIONE, Brexit: un divorzio antistorico che può cambiare l’UE
 See. BARDI, Political parties, responsiveness, and responsibility in multi-level democracy: the challenge of horizontal Euroscepticism, in European political science 13, 2014, p. 352 ff.
 See DASTOLI, President of the European Movement – Italian Council, Dopo il Referendum britannico l’Europa riparta dal sogno di Altiero Spinelli invece di maledire il buio è meglio accendere una candela. La nostra candela è il Manifesto di Ventotene, report from the meeting of the “Gruppo dei 20” of the 7th July 2016.
It should be stressed that the European Union is perceived from wide and growing sectors of the European population as a moloch that only produces constraints and imposes duties (i.e. the critics on the refugee and migration question, on the already mentioned austerity policies). The problem is part of a general tension – that from at least 15 years characterizes all the liberal democracies – between what the citizens wish and what the governments can actually do because of the limitations and the commitments taken on earlier (See. MAIR, Representative versus responsible government, on http://www.mpifg.de/pu/workpap/wp09-8.pdf, 2009; MAIR, Bini Smaghi vs. the parties: representative government and institutional constraints, EUI Working Papers, RSCAS 2011-22; BARDI – BARTOLINI – TRECHSEL, The role of parties in twenty-first century politics: responsive and responsible. 2015). With specific reference to the European Union, this general situation is further worsen because of the stickiness of the European decisional mechanism and because of the absence of the original “permissive consensus”, according to which all was accepted in the name of European integration, that was considered a wealth itself to protect (CARRUBBA, The electoral connection in European Union politics, in The Journal of Politics, 63(01), 2001, p.141 ff.). This situation has created a strong crisis on the legitimacy of the European institutions and consequently of the decisions taken. To face this crisis, mainly political, many suggestions have been handed out to better the elective mechanisms and those to structure the political representation; in this sense see BARDI – BRESSANELLI – CALOSSI – GAGATEK – MAIR – PIZZIMENTI, How to Create a Transnational Party System, Brussels, European Parliament, 2010; CALOSSI, Towards European Electoral and Party Systems, IAI Working Papers, 15|47, 2015).
 For example, the United Kingdom could no longer take advantage of the “passport” regime for the distribution of the EU fund quotas. It is highlighted however that as of today the major English financial groups use mainly asset management companies registered in the Republic of Ireland and in Luxemburg for the UCITS quota distribution within the EU, Greenbaum, Colomba e Zeppieri, Brexit: prospettive e possibilità per il settore dei servizi finanziari, consultable fon dirittobancario.it. In this regard see also Annunziata, Mercati finanziari, un futuro meno londinese e più europeo, in Lavoce.info, 28th June 2016; Armour, Brexit to the European Economic Area: What Would It Mean?, in Oxford Business Law Blog, 19th June 2016, consultable on https://www.law.ox.ac.uk/business-law-blog/blog/2016/07/brexit-european-economic-area-what-would-it-mean.
 See Council of the European Union – ECOFIN (2016), Council Conclusions on a roadmap to complete the Banking Union, Brussels, 16th June 2016.
 For the data and the evaluations of the monetary policy, see MINENNA, Brexit: la Bank of England si muove. Le prospettive future della politica monetaria britannica e gli impatti sull’Europa, consultable on dirittobancario.it.
 See IMF world economic outlook, in which the cut concerning the growth of the GDP was higher in the UK than for other European Countries and for the Union as a whole. On this subject see RICCIARDI, Da Brexit tre freni alla crescita: i previsori della BCE tagliano le stime, su La Repubblica 22nd July 2016, consultable on http://www.repubblica.it/economia/2016/07/22/news/bce_brexit_economisti_stime_pil-14461829. See also the economic pre-referendum draft on http://www.corriere.it/economia/16_giugno_16/bce-brexit-rischi-la-crescita-dell-eurozona-1ba88bec-3399-11e6-b8e9-6b78a4af30ec.shtml.; Mantero, La Bce su Brexit: rischi in aumento per l’economia, l’incertezza resta alta, on IlSole24Ore of 18th August 2016, consultable on http://www.ilsole24ore.com/art/mondo/2016-08-18/la-bce-brexit-rischi-aumento-l-economia-l-incertezza-resta-alta–161032.shtml?uuid=ADCYfD7.
 For a first comment on the architecture of the European financial system please refer to PELLEGRINI, L’architettura di vertice dell’ordinamento finanziario europeo: funzioni e limiti della supervisione, in Riv. trim. dir. econ. 2012, p.52 ff.; more recently TROIANO, L’architettura di vertice dell’ordinamento finanziario europeo, in PELLEGRINI (edited by), Corso di diritto pubblico dell’economia, Padua, 2016, p. 505 ff.
 Milan and Barcelona at this time seem to be the favourite candidates for being the next headquarters of the EBA (see. Olivieri A., Borsa e sede dell’Eba: da Brexit doppia opportunità per Milano, published by Il Sole 24 Ore on 3rd July 2016).
 See, among others, VV.AA., La MiFID II. Rapporti con la clientela – regole di governance – mercati, edited by TROIANO, Padua, 2016. On the Capital Markets Union, see. ESMA RESPONSE to the Commission Green Paper on Building a Capital Markets Union, 13th May 2015 (2015/ESMA/85, on http://www.esma.europa.eu EUROPEAN COMMISSION, Commission Staff Working Document, European Financial Stability and Integration Review (EFSIR): A focus on Capital Markets Union, Brussels, 25.4.2016 SWD(2016) 146 final; EUROPEAN COMMISSION, Commission Staff Working Document, Capital Markets Union: First Status Report, Brussels, 25.4.2016 SWD(2016) 147 final.
 The Deutsche Boerse president, Faber, specified that, in view of a possible Brexit, the two partners had already provided for a “referendum committee”, presided by Faber himself, with the task to act as a consultant in order to respect the requests of the authorities to obtain the approval for the merge. Briefly, see PIANESE, Lse, sì alla fusione con Deutsche, from MilanoFinanza of the 4th July 2016.
 On this subject briefly see. Marvelli, Brexit e Borse, authority Ue in pressing sulla fusione tra Londra e Francoforte, from Corriere della Sera 3rd July 2016.
 For further studies on financial volatility, See DEN HAAN – ELLISON – ILZETZKI – MCMAHON – REIS, The Brexit question will increase financial market volatility, su VOX EU, 26th february 2016; SPRINGFORD – WHYTE, The consequences of Brexit for the City of London, Centre for European Reform, 2014. Moloney, UK Financial Services Regulation and Brexit: the Fracturing of Financial Governance, in Oxford Business Law Blog, 10th August 2016, consultable on https://www.law.ox.ac.uk/business-law-blog/blog/2016/08/uk-financial-services-regulation-and-brexit-fracturing-financial; Götz – Tröger, (Don’t) Blame It All on Brexit…, in Oxford Business Law Blog, 02 agosto 2016, consultabile su https://www.law.ox.ac.uk/business-law-blog/blog/2016/08/don%E2%80%99t-blame-it-all-brexit%E2%80%A6; Enriques, Why the UK Has Currently Little Chance to Become a Successful Tax or Regulatory Haven, in Oxford Business Law Blog, 07 luglio 2016, consultabile su https://www.law.ox.ac.uk/business-law-blog/blog/2016/07/why-uk-has-currently-little-chance-become-successful-tax-or.
Mirella Pellegrini is Full Professor of Economic Law at the Department of Business and Management of LUISS Guido Carli University in Rome. She is member of the Editorial Board of “Law and Economics Yearly Review”, of the Scientific Committee for the Evaluation of “Rivista Trimestrale di Diritto dell’Economia”; of the Editorial Board of the Journal Bankpedia-Assonebb; of the Scientific Committee of the serie “Ricerche giuridiche”, ES (Editoriale Scientifica) editor; of the Scientific Committee of the Association “IGS” (Istituto per il Governo Societario); of the Scientific Committee of the Series “Diritto Pubblico e Diritto dell’Economia” (Giappichelli); of the Scientific Committee of the magazine Banche e Banchieri. She is the author of numerous publications (monographs, essays, articles, commentaries, research papers) on EU and Italian banking and financial regulation, securities regulation, company law.
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