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Bloomberg's Micklethwait on Brexit Implications for EU (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington,
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  Speaker 1: d C, Bloomber to Boston, Bloomberg twelve hundred to San Francisco,
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  Speaker 1: Bloomberg to the Country series Exam General one nine and
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  Speaker 1: around the globe the Bloomberg Radio, Plum, DAP and Bloomberg
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  Speaker 1: dot Com. This is taking stock a political earthquake. That's
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  Speaker 1: what Britain's vote to leave the European Union is being
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  Speaker 1: likened to, with after shocks hitting markets policy makers. In fact,
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  Speaker 1: it has led Prime Minister David Cameron to resign. I
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  Speaker 1: want to know now, Pam, what next? What is the
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  Speaker 1: next step for the for the UK, not just internally
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  Speaker 1: but externally well internally it would have to be passed
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  Speaker 1: by Westminster, by Parliament. And are an estimated one hundred
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  Speaker 1: and sixty of the six hundred and fifty MP's elected
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  Speaker 1: last year they want Britain to leave. The majority want
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  Speaker 1: them to stay. So we'll find out more coming up
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  Speaker 1: right now, let's go to Charlie Pellegan the Bloomberg news
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  Speaker 1: room with the Bloomberg Business flag political earthquake. Indeed, markets
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  Speaker 1: are tumbling, and thank you very much, Pim, Thank you, Kathleen,
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  Speaker 1: the DAL, the SMPNAZDAK all declining U S stocks, joining
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  Speaker 1: a sell off in global risk assets on speculation that
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  Speaker 1: the UK decision to leave the European Union would hamper
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  Speaker 1: worldwide growth. The victory of the Leave campaign stunned many
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  Speaker 1: investors who put wagers on risk your assets over the
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  Speaker 1: past week, as book makers odds suggested the chance of
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  Speaker 1: a so called Brexit was less than one in four. Well,
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  Speaker 1: now that the vote is done, Jacob Kirkergard, senior fellow
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  Speaker 1: at the Peterson Institute for International Economics, is now the
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  Speaker 1: Britain has voted to leave, don't let the door you
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  Speaker 1: know the rest. I certainly believe that it should be
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  Speaker 1: handed as quickly as possible because their long word draws
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  Speaker 1: on uncertainty will weigh on not just the UK economy,
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  Speaker 1: but on the entire European economy. Uh and I think,
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  Speaker 1: quite frankly believe that the once again David Cameron has
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  Speaker 1: put basically conservative party politics over the broader destiny of
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  Speaker 1: European integration, which is something that isn't gonna endear him
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  Speaker 1: very much to the other leaders that he's going to
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  Speaker 1: be meeting with in just a few days and We'll
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  Speaker 1: have more coming up in just a moment on what's
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  Speaker 1: next for the United Kingdom post Brexit. Here's where we
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  Speaker 1: stand in terms of US equities bouncing along the bottom
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  Speaker 1: right now, with the SMP down seventy two thousand, forty two,
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  Speaker 1: a drop of three point three percent down, industrials down
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  Speaker 1: five hundred seventy eight, a drop there of three point
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  Speaker 1: two percent, gold surging four point four percent, and a
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  Speaker 1: two thirty two on Wall Street. Now, let's take a
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  Speaker 1: look at other news from around the world. Thank you,
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  Speaker 1: Charlie from the Bloomberg Newsroom. I'm Julie Hyman. President Obama
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  Speaker 1: reacting moments ago to the British vote to leave the
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  Speaker 1: European Union. I do think that yesterday's vote speaks to
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  Speaker 1: the ongoing changes and challenges that are raised by globalization.
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  Speaker 1: But while the UK's relationship where the EU will change,
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  Speaker 1: one thing that will not change is the special relationship
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  Speaker 1: that exists between our two nations. Donald Trump is calling
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  Speaker 1: the British vote a positive one, despite concern and financial
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  Speaker 1: markets in Scotland for the opening of a Trump golf course.
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  Speaker 1: The likely Republican nominee said he saw parallels between frustrations
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  Speaker 1: expressed by British voters. That's really what's happening in the
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  Speaker 1: United States, and I think you see that, and that's
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  Speaker 1: what's happening in many other places in the world. They're
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  Speaker 1: tired of it. They want to take their countries back.
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  Speaker 1: Democratic presumptive nominee Hillary Clinton says we need to respect
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  Speaker 1: the choice the United Kingdom has made. Clinton also said
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  Speaker 1: our first task has to be to make sure the
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  Speaker 1: economic uncertainty created by these events does not hurt working
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  Speaker 1: families here in the United States. Scottish First Minister Nicola
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  Speaker 1: Sturgeon said it is highly unlikely Scotland will hold a
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  Speaker 1: second independence referendum following Britain's decision to withdraw from the EU.
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  Speaker 1: Six of Scottish voters backed remaining in the EU. City
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  Speaker 1: officials have slapped the Trump organization with the ten thousand
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  Speaker 1: dollar fine after company representatives missed a hearing to resolve
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  Speaker 1: zoning violations. A Trump attorney was supposed to attend an
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  Speaker 1: administrative hearing yesterday over violations of a special permit, but
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  Speaker 1: no one showed up. The Trump executive says the company
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  Speaker 1: is asking for a new hearing. Global News twenty four
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  Speaker 1: hours a day, powered by more than twenty six hundred
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  Speaker 1: journalists and analysts and more than one twenty countries from
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  Speaker 1: the Bloomberg newsroom. I'm Julie Hyman. This is Bloomberg, Charlie,
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  Speaker 1: and we thank you. In the SMP, five hundred indecks
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  Speaker 1: just turning negative for the year, down point one percent
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  Speaker 1: year to date. Down Jones Industrial Average now unchanged year
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  Speaker 1: to date. Recapping the numbers SMP falling seventy two points
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  Speaker 1: to two thousand forty one, a drop there of three
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  Speaker 1: point four percent. I'm Charlie Pellatar. Brexit coverage continues, and
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  Speaker 1: that's a Bloomberg business flash. This is taking stock with
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  Speaker 1: Kathleen Hayes and Pim Fox on Bloomberg. Britten's political earthquake
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  Speaker 1: has created after shocks, buffeting markets, policymakers, political upheaval in London.
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  Speaker 1: The pound now at its lowest level since Prime Minister
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  Speaker 1: David Cameron resigning. Joining us now to put this in perspective,
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  Speaker 1: not only what happened, but where we go next. John
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  Speaker 1: Michael Thwaite, editor in chief for Bloomberg Editorial and of
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  Speaker 1: course a man who knows the UK very well. Yes,
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  Speaker 1: well you know this. It's funny even if you're on
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  Speaker 1: the side that wanted to leave. Somehow, this doesn't feel
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  Speaker 1: like a day when people are waving flags and and celebrating,
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  Speaker 1: because even if you wanted to go and imagine you
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  Speaker 1: just you, you must feel something kind of somber, and
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  Speaker 1: I think there is that. Actually, what's interesting is even
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  Speaker 1: in Boris Johnson, one of the great jokers, you know,
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  Speaker 1: he made a very kind of dead pan speech, not
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  Speaker 1: least also saying let's not rush into this, Let's do
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  Speaker 1: this in three four months time after we've selected a
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  Speaker 1: new Tory leader, records him. But then then let's go
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  Speaker 1: and approach Brussels. And there's that side. But I rememb
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  Speaker 1: watching the results last night with a young guy who
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  Speaker 1: was sort of said he was mildly pro Brexit, and
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  Speaker 1: then after once it's sort of sunk in, he's only
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  Speaker 1: thought I might lose my job. I might You know
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  Speaker 1: that all those things are playing out at the moment,
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  Speaker 1: and you even see an attempt to sort of put
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  Speaker 1: around the petition to say maybe there should be a
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  Speaker 1: second referendum. All those things are out there at the moment,
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  Speaker 1: and people, I think people are still coming to terms
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  Speaker 1: with it. Explain if you can what happens next, particularly
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  Speaker 1: in terms of Parliament. Yes, I should say what what
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  Speaker 1: happens is the referendum has to do with Parliament, so
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  Speaker 1: it has to do with the recommendation de Parliament. Parliament
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  Speaker 1: then has to vote basically to take file effect what
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  Speaker 1: they call Section fifty, which is part of the part
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  Speaker 1: of the European Union's constitution. It basically says, if you
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  Speaker 1: want to leave, you know, you apply under this and
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  Speaker 1: then there's a two year um negotiating period. Now, the
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  Speaker 1: obvious point is that you could start negotiating before you
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  Speaker 1: do that, and so what is happening at the moment
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  Speaker 1: is Angler Merkel is a bit like a rather angry
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  Speaker 1: spouse who's just saying, forget it, let's get a quickie
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  Speaker 1: divorce and get out of this. By contrast, on the
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  Speaker 1: other side, you've got, as I said, Boris Johnson and
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  Speaker 1: also the general the British thing is no, no, let's
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  Speaker 1: let's kind of get an idea where things are and
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  Speaker 1: then we're coming. We won't petition until September October, and
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  Speaker 1: so you've got this process that could go on to
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  Speaker 1: three years and that that actually is in some ways
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  Speaker 1: quite worrying because it's over that period that a lot
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  Speaker 1: of companies will start to decide is it worth investing
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  Speaker 1: in Britain at this precise moment? Would you buy real
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  Speaker 1: estate in London? It could be one of the great
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  Speaker 1: buys of our time, but it's it could also be
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  Speaker 1: something which everyone thinks is about to go down, and
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  Speaker 1: what happens with that uncertainty continues and so on and
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  Speaker 1: so on. So how does how is this go with
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  Speaker 1: the rest of Europe? Does it do? Do? Do you? Germans?
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  Speaker 1: Does do the Germans? And the other The most powerful
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  Speaker 1: kind is there to say, well, gosh, I guess we
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  Speaker 1: better like help them. We connact angry, but help this
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  Speaker 1: not fall apart and and and enter these negotiations in
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  Speaker 1: that spirit or this story that um let's see, it's
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  Speaker 1: a senior Spanish minister, according to our Bloomberg News stories,
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  Speaker 1: saying that Britain leaving the European Union has opened up
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  Speaker 1: a new panorama on the status of Gibraltar. He called
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  Speaker 1: on Britain to enter negotiations on joint sovereignty. I mean
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  Speaker 1: there will be a lot of things that suddenly go
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  Speaker 1: up in the air against the background of that, because
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  Speaker 1: I think you brought her way back in the nineteen seventies.
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  Speaker 1: Is one of the issues between Britain and the EU.
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  Speaker 1: When when when when Britain joined I think more seriously
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  Speaker 1: or or or certainly a bigger issue. Look at what
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  Speaker 1: is happening between France and Germany. You know, Germany has
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  Speaker 1: tended to take the following attitude that it is more
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  Speaker 1: pro the British view of Europe. Wants reforms, it wants
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  Speaker 1: things to get on, it wants to do stuff, and
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  Speaker 1: why isn't France doing stuff because it isn't. And Furnish,
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  Speaker 1: by contrast, have been slightly, kind of not entirely enthusiastic
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  Speaker 1: about the British participation in the EU. I think, by
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  Speaker 1: one measure, even more French people wanted the British out
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  Speaker 1: than Britain's wanted the British out. But the French starting
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  Speaker 1: point is let's just say goodbye to Britain and get
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  Speaker 1: them out and warn other people by treating Britain toughly.
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  Speaker 1: We put it that way, But then the question about
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  Speaker 1: how much reform goes with that is unclear. On the
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  Speaker 1: German side, I think on this thing, they are more
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  Speaker 1: likely to be a little bit similar to the French
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  Speaker 1: on one thing on the treat them tough, because I
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  Speaker 1: think Anglo Merkele's starting point is she doesn't want this
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  Speaker 1: to happen again. And what better way of giving a
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  Speaker 1: reason not to do this to the Netherlands, to any
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  Speaker 1: of the other people who might go, than for the
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  Speaker 1: British to get a conspicuously bad deal. Pick up on that,
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  Speaker 1: because the political implications for France with the far right
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  Speaker 1: National Front Marine leper is that going is this this
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  Speaker 1: vote going to help her campaign very much? So, I
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  Speaker 1: mean she is that. All across Europe you have these parties,
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  Speaker 1: some of them on the more extreme side, others increasingly mainstream.
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  Speaker 1: She is a good example, you know, she has She
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  Speaker 1: is almost certain under current polls to reach the last
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  Speaker 1: round of the presidential election in France because she will
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  Speaker 1: be that she will be the first candidate, and the
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  Speaker 1: general view they have a runoff which they come down
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  Speaker 1: to the two most popular candidates. The general view is
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  Speaker 1: that you know, she will get to the vote and
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  Speaker 1: whoever gets five or whatever will be the other candidate
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  Speaker 1: in a sort of multi party m a multi candidate system.
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  Speaker 1: But for her, this backs up her idea that Europe
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  Speaker 1: is heading the wrong direction. She's also talking about leaving it.
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  Speaker 1: You know this, this is there are a lot of
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  Speaker 1: other people out there. The level to which Europe as
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  Speaker 1: a whole is coming undone is there. Thank you very
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  Speaker 1: much for spending time with this. John Mickle twaite, editor
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  Speaker 1: in chief, Bloomberg Editorial. More Brexit coverage coming up on
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