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This time the traveller on the European tour, known to the well-disposed reader from his previous contributions to finews.ch, sits under a thousand-year-old olive tree in Apulia, and for once is in no hurry. In a pensive mood, he looks back over the first fortnight since Brexit. He was mistaken in his strong conviction that the British electorate would vote to remain in the EU.

In fact, he was so convinced that shortly before June 23, when the markets were gently climbing in anticipation of a positive outcome to the referendum, he bought British pounds. This bet is now lost, and he can put the option certificate in the recycling bin.

The sun is at its zenith, it is hot in Apulia, and the noonday devil creeps along the hedgerows. And so the traveller’s thoughts wander and he thinks of the children’s verse that he has now sung at three stages in his life, the third time as a grandfather: «Giddy up, giddy up rider, when he falls, then he yells.»

«Boris Johnson’s personal life is full of unappetising escapades»

Seldom have so many political pundits been wrong, and seldom has there been such an outcry after an event. And some really have been thrown from the saddle: «If he falls in the ditch, the ravens will get him out.» This applies first and foremost to the unfortunate prime minister David Cameron. In order to quell an internal party rebellion and deal with EU sceptics, he initiated the referendum. He lost. Cameron was a good, strong head of government. We will soon miss him.

«If he falls in the swamp, we will hear the rider plop.» This is the fate of Boris Johnson. He does not have the calibre to be a leader, his personal life is fully of unappetising escapades, and he miscalculated, the traveller assumes. He had planned to team up with Nigel Farage after Brexit and bring him into his government.

The Tories quickly realised that this prospect was exactly what they didn’t want, and the purely goal-based alliance of the Tory right with UKIP should not outlive Brexit. All that can be seen now in the swamp is the yellow mop of Boris’ hair peeping out, the traveller tells his grandchildren, and we will not miss him. Farage plops in right beside him. And we will not miss him either.

«What we will see emerging from the ruins will not be a more equitable society, to the taste of the left»

«If he falls in the hedge, he’ll be eaten by the snails.» This fate awaits all those who have approached this decision with cynicism or official arrogance. Donald Tusk joked that what doesn’t kill you makes you stronger. Martin Schulz took refuge in words that in classic left-wing style blamed the entire calamity simply on the free markets and the banks, and Jean-Claude Junker called again for even more power for the Commission.

These bit players belong to the snails because in time it will be revealed that the EU will not be made stronger by Brexit, but weaker. What we will see emerging from the ruins will not be a more equitable society, to the taste of the left, but more radical right-wing populism. Meanwhile, the individual states will resist transferring more power to the Commission more than before.

«Adolf Muschg even reaches for old Nazi terms»

To the snails can also be entrusted all the commentators who have praised the British to the heavens for their decision, or the opposite, poured scorn on them. Roger Koeppel worked himself into a state of euphoric excitement and predicted new life blooming on the ruins.

Adolf Muschg is glad that the British are out because the EU is rid of an unpleasant, market-oriented troublemaker. To add contempt to his comments, Muschg even reaches for the old Nazi term for the English, perfidious Albion. Such cynicism belongs to the snails, because it does not contribute anything useful.

In the meantime, the European traveller under the olive tree has fortified himself with a coffee and cool water. A cool breeze is coming from the sea and he turns towards serious reflections.

You can twist and turn the decision of the British as much as you like, nothing positive can be gained from it. It would be naïve to think that European politicians will now come to their senses and quickly implement the long overdue reforms.

«The Brexit news comes in a world that is instable in many ways»

On the other hand, Brexit is also not the catastrophe of the century, because the political and economic system will adapt to the new situation over time and minimise the damage caused. The most likely effect of Brexit will be that Europe will be a little more weakened its dealings with the great power blocks, the recovery will take longer, and the influence of destructive powers at the edge of Europe, like Russia and Turkey will increase even more. The EU minus the U.K. will produce a gradual worsening of a trend that was not good in the first place.

The Brexit news comes at a time when the world is instable in many ways. The global economy is growing too weakly to allow everyone decent advancement, and political regimes are increasingly fragile, as can plainly be seen in the shocking results of the Bertelsmann Stiftung transformation index.

From the beginning of the 1980s until the large financial crisis struck, the world saw a trend of globalization unique in the history of mankind, that mainly, but not exclusively, had positive effects. The economic upturn driven by globalization allowed hundreds of millions of people worldwide to join the economically-viable middle classes.

«A split in the world’s largest economic block is definitely not a good development»

More than a billion people were freed from the yoke of extreme poverty. All around the world, people enjoy the advantages of modern technology, from the internet to cheap travel. Thanks to medical advances, the average life expectancy of all the people on the planet has risen to a level only seen in highly developed countries thirty years ago.

For some years, this positive development has been held back. The financial crisis, geopolitical development such as ISIS, or the recent increasing aggression of the Russians, the economic stalling of Brazil and other Latin American countries, the collapse of democracy and the rule of law in many places, terrorism and the fracturing of the world into regional blocks have led to a situation in which increasing global prosperity and growth cannot be maintained.

In this context, a substantial split in the world’s largest economic block is definitely not a good development.

In the short term, the United Kingdom will lapse into recession as a result of the vote; the first signs of a slowdown are already visible, according to the Bank of England. The downturn will definitely also be carried across to the continent where economic need is greater than in Britain in many places. The IIF predicts that the emerging market region that will be most affected by Brexit will be Central and Eastern Europe.

«The British will be able to swim free – they are in a stronger negotiating position than the EU»

However, such short-term economic developments are not the decisive thing. The long-term effects are more important. But here too I see hardly any positive aspects: I am more optimistic for the UK. The British will be able to swim free. They are in a stronger negotiating position than the EU because they have a government system that gives all power to the prime minister in one vote.

The British will be able to network better with the Anglo-Saxon and global world, conclude free-trade agreements with India and other important countries, and secure a global repositioning for the City. They will also put every effort into keeping Scotland and Northern Ireland in their union – and they will manage this because the Scots and the Northern Irish are still closer to England than the EU, also in terms of economic interdependence.

«It could be now that the EU will take Brexit as a wake-up call»

In my view, the situation for the EU is more problematic. They have lost the following: England as the global window of Europe; English as an official language; the world’s strongest financial center, three extremely successful universities, in that the only European universities that appear in the ranking of the 20 best universities of the world (Times Higher Education Index) will soon be outside the EU; Europe’s and the world’s most innovative country, after Switzerland (Global Innovation Index); a tradition of democracy and rule of law that is not found on the Continent; a pragmatic belief in the spontaneous order of the markets, upon which the Anglo-Saxon success model is built, and which makes advocates of the state interventionist systems of the Continent doubt the wisdom of their ways; and generally the loss of a voice of reason and sense of humour. Europe has become more provincial overnight.

It could be now that the EU will take Brexit as a wake-up call and start implementing the necessary reforms. These are being demanded from all quarters but in reality nothing much is happening. The interest groups and trends are too conflicting.

The institutionalists like Junker or Schulz want to strengthen the central organs like the European Commission and European Parliament and to transfer further powers to the EU. German Chancellor Angela Merkel and other supporters of a Europe of nation states are opposed to that, although they ultimately want more and not less Europe.

Finally, there are the eastern European countries who want stronger cooperation in security matters, to defend their borders against Russia, but who are otherwise adopting a nationalist stance. There are the supporters of austerity in the north and the proponents of a relaxed fiscal policy like France and the southern states, who also want debts to be shared by the community. Only one direction is missing, namely the supporters of a free-market order in which there is no more regulation than really necessary.

This is not surprising when you consider that continental EU is essentially a common product of social democratic, Christian democratic and Catholic conservative movements. Truly liberal parties are only found in small countries, including Switzerland. The British were the badly needed corrective influence.

«Many of these countries are in the hands of corrupt elites»

The liberal powers have always forced the concept of free trade, and its consistent implementation has resulted in individual countries scaling back their internal regulation where it created inefficiencies in the market, to succeed in the free trade zone.

What will happen now, again because the British will be absent, is that the traditional European powers, who love state intervention and bureaucracy, will cobble together an increasingly densely regulated internal market. After Brexit, the free trade agreements already negotiated with the Canadians and Americans will be sacrificed on the altar of this mentality.

From the long historical viewpoint, the Continent has regressed back to its old ways, as the two classic hegemonic powers, France and Germany, stand head to head again, one weak but ambitious, the other strong but apathetic.

In this situation the impoverished southern countries and the nine eastern European states take Britain’s place as referees. However, all of these countries have narrow and extensively self-serving agendas that revolve around money, security and nationalist dreams. A lot of these countries are in the hands of corrupt elites. They are not suitable referees.

«It has once again been shown that we made the right decision in not joining the EU»

Furthermore, populist movements of differing hues are rising up everywhere from an increasingly ugly production line. We are being plagued by clowns and inhibition-free demagogues like Wilders, Orban, Le Pen, Grillo, Podemos, Kaczynski and others. To think that it will be possible to build a better Europe with such individuals would require a good dose of naivety or a shocking lack of historical awareness.

In the middle of this alarming situation is Switzerland. It has once again been shown that we made the right decision not to join the EU. Brexit does not affect us directly because we are not part of the union. However, we will be affected by collateral damage, especially from a threatened economic downturn and the general disarray in the European Continent, that has become rather bigger than smaller.

«We must not move closer to Europe»

We have lost our British allies with whom share a fundamentally liberal body of thought, and find ourselves surrounded by powers that are not always sympathetic and have an alien political culture. In this situation our government is playing it slow with the EU and that is by far the best thing we can do.

We must not move closer to Europe. No, no we need to concentrate on the essential, to ensure a functioning working relationship with the EU, which means solving the problem with the initiative to stop mass-immigration and maintaining (but not expanding) the bilateral agreements – not more.

«The EU will not last a thousand years»

We will soon have to throw the draft for an institutional framework agreement in the recycling bin, along with the option certificate for British pounds mentioned earlier. The bilateral meshwork so carefully constructed by our politicians and diplomats over the past twenty years is not inspired by warmth or enthusiasm for any kind of great European idea. It will prove to be more resistant and also more realistic than Britain’s membership.

Only one thing is certain: The EU will not last a thousand years like the olive trees in Apulia. That is why the mood of the traveller is tinged with disappointment and sadness at the departure of the British from Europe. He is afraid of the new order on the Continent and of its often unreasonable politicians. But he is relaxed and cheerful that Switzerland is better placed than any other European country to withstand what comes.

Peter Kurer is partner in the private equity firm BLR, chairman of the publisher Kein & Aber and of the telecoms company Sunrise, as well as sitting on many company and advisory boards.

He studied law and political science at the universities of Zurich and Chicago. Afterwards he gained his attorney’s license in the canton of Zurich. In 1980 he joined the law firm Baker & McKenzie, and became partner in 1985. In 1991 he founded the law firm Homburger with seven colleagues in Zurich. In 2001 Kurer was appointed general counsel and member of senior management at UBS. In 2008, he took over the chairmanship of the bank during the financial crisis.

His latest book «Legal and Compliance Risk: a Strategic Response to a Rising Threat for Global Business» was published in February 2015 by Oxford University Press.

Previous contributions: Rudi Bogni, Adriano B. Lucatelli, Peter Kurer (twice), Oliver Berger, Rolf Banz, Dieter Ruloff, Samuel Gerber, Werner Vogt, Walter Wittmann, Albert Steck, Alfred Mettler, Peter Hody, Robert Holzach, Thorsten Polleit, Craig Murray, David Zollinger, Arthur Bolliger, Beat Kappeler, Chris Rowe, Stefan Gerlach, Marc Lussy, Samuel Gerber, Nuno Fernandes, Thomas Fedier, Claude Baumann, Beat Wittmann and Richard Egger.