Financial markets recovered slightly after the result of Thursday’s referendum wiped a record $3 trillion off global shares and sterling fell to its lowest level in 31 years, but trading was volatile and policymakers said they would take all necessary measures to protect their economies.
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Cameron is set to meet with European Commission President Jean-Claude Juncker, and then join a working dinner with the 27 other EU leaders to discuss the terms of Britain’s exit.
“No notification, no negotiation”, he said, hours before European Union leaders begin a two-day summit in Brussels to hear Cameron’s position and chart the way forward.
The vote last week to pull out of the union has wounded the European project and left Britain with a nasty hangover, sending the pound spiraling, dampening markets, creating a leadership vacuum and triggering talks of Scottish secession from Britain. “Because that is good for us and that is good for them”.
“That’s a long way down the road and it may never happen”, said Gavin Barrett, an expert on European constitutional law at University College Dublin. “These governments will have a strong interest in negotiating hard with the United Kingdom, to convey to their own voters that any flirtation with anti-EU forces has negative consequences”, he said in a note.
Mr. Juncker described Mr. Cameron as “still a friend despite the vote”.
European Union lawmakers have made clear they hope he will trigger the exit process at the dinner, but an European Union official said on Monday that was unrealistic given the political chaos in London, where both Cameron’s party and opposition Labour are deeply divided. As well as the question mark over the next leader of the Conservative party (and whether he or she will be from the remain or leave camp) there is a growing revolt in the opposition Labour party with a large number of Labour politicians calling for Jeremy Corbyn to resign.
At the European Union summit, she and other leaders hoped to hear Cameron’s position and chart the way forward.
“Why don’t we just be pragmatic, sensible, grown-up, reasonable. and cut a sensible tariff-free deal?” he asked.
For Britain, the outlook is bleak.
Britain’s reluctance to start divorce proceedings has led some countries to think there may be space for a solution to keep it in the bloc, with Poland’s ruling party chief suggesting Monday there should be a second referendum.
“It’s very clear that the country is going to be poorer as a result of what’s happening to the economy”, he told the BBC.
European countries are particularly anxious about the impact on the rest of the European Union of the uncertainty created by Britain’s vote to leave, with little idea of when, or even if, the country will formally declare it is quitting. “Well, I have to say, you’re not laughing now, are you?” he said. “But I would not fight over a short period of time”.
“That means that, and we agree on this point, there will be neither informal nor formal talks on a British exit until the European Council has received the [UK’s] request for an exit from the European Union”. As many as 150 of Labour’s 229 MPs could vote to dethrone him, the right-leaning Daily Telegraph reports.
Tusk was already looking further ahead.
The impact may also hit by way of the financial markets.
In a speech in Portugal Draghi said central banks around the world should aim to align their monetary policies to mitigate “destabilizing spillovers” between economies.
The Chancellor said his stark predictions about the impact on the public finances “have started to be borne out by events” such as a tumbling pound and markets – despite a slight rally this morning. He may not be in great position to become the Prime Minister. They are protected from some of the turmoil by capital controls, but Chinese Premier Li Keqiang sought to reassure nervous investors.
U.S. President Barack Obama took a similar line. “There’s been a little bit of hysteria post-Brexit vote, as if somehow NATO’s gone, the trans-Atlantic alliance is dissolving, and every country is rushing off to its own corner”.
But Cameron’s trip also highlights two key strands of thought in Europe on how the continent should now treat Britain, and which one wins out in the coming weeks will be key to deciding the future of the country and the EU.
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Dutch Prime Minister Mark Rutte said England had collapsed “politically, monetarily, constitutionally and economically”.
