According to the latest survey by Pew Research Center, which questioned the Europeans, “if the UK were to leave the European Union, this would be a good thing or bad thing, most European feel it would be bad. About 70% of the Europeans surveyed, considered Brexit as a bad thing.

UK’s favorable rating is highest in Sweden, where 89% of the survey respondents felt that Brexit would be a bad thing. Even France, which a bit more hostile towards the UK, 62% felt that leaving would be a bad thing. In Germany 74% considered leaving to be bad for theEuropean Union.

So far the market has been pricing the UK part, where Sterling is largely expected to decline. Recent option market pricing suggests implied volatility in one month Pound/Dollar option to be above 22%. Such pricing is massive, but participants have largely ignored the consequences for Europe since it is difficult to price in and risks are more in the longer term.

The biggest risk is unravelling of the Union. Britain’s departure at a time, when Euro-skeptics are on the rise, even in Germany, poses significant risks to the integrity of EU. Moreover, if Britain prospers outside, bigger risks are more would want to follow.