Brexit Update: Divergent EU Opinions Could Create Further Uncertainty
Brexit Update – June 27th
Divergent EU Opinions Could Create Further Uncertainty
Hopes for a slow departure for the United Kingdom (UK) from the European Union (EU) were dashed by rhetoric from European leaders in the wake of Thursday’s referendum. Following immediate aftershocks to the economy, British politicians have called for a drawn-out and more deliberate divorce from the EU, asserting that only the UK can decide when to trigger the Lisbon Treaty’s Article 50. With Prime Minister David Cameron’s resignation announcement, the UK hopes to delay initial negotiations until October.
Top EU leaders have been almost unanimously unreceptive to the UK’s approach, with the exception of German Chancellor Angela Merkel. She has said “it should not take ages,” but still shouldn’t take a “long time.” Others have been much harsher. European Commission (EC) President Jean Claude Juncker has insisted that the UK cannot wait until October to begin negotiations; instead, he said, “I would like them to get started immediately.” Martin Schulz, President of the EU Parliament, said his institution was examining how to accelerate the implementation of Article 50. French and German Foreign Ministers have also advocated for a hastening of the standard two-year exit timeline. The disagreement between UK and EU leaders is only expected to further instability as the parties embark on this unprecedented and uncertain process.
£1 GBP = $1.32 USD
€1 EUR = $1.10 USD
(as of 9:00 AM EST, 6/27/2016
Statement by George Osborne following EU Referendum – Chancellor of the Exchequer, George Osborne, attempted to calm market unrest with his statement today. Although he admitted the economy would “have to adjust to the new situation,” he insisted the UK was well positioned.
FCA Statement on Brexit – The Financial Conduct Authority (FCA) released a statement on the implications of Brexit on UK financial regulation, acknowledging that much of domestic regulation is based on EU legislation and therefore regulatory change was inevitable.
Moody’s Changes UK Outlook – On Friday, Moody’s Investors Service changed the UK’s sovereign rating from stable to negative, anticipating a “prolonged period of uncertainty.”
Global Markets Lose $2 Trillion in Equity – Reuters reports that global equity markets loss more than $2 trillion on Friday. According to Standard & Poor’s, the losses represent the largest ever, greater than the 2008 financial crisis and 1987’s Black Monday crash.
London Likely to Lose Banking Jobs – The Financial Times and other publications report on UK banks’ plans to shift operations out of London and back into the EU. The UK financial hub stands to lose thousands of jobs as banks like HSBC already prepare to move staff and offices over the next year.
Political Deliberation Continues – The Guardian covers the unfolding discussions amongst global politicians surrounding the uncertain Brexit process.