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

want to know now, Pam, what next? What is the next step for the for the UK, not just internally but externally well internally it would have to be passed by Westminster, by Parliament. And are an estimated one hundred and sixty of the six hundred and fifty MP's elected last year they want Britain to leave. The majority want them to stay. So we'll find out more coming up right now, let's go to Charlie Pellegan the Bloomberg news

room with the Bloomberg Business flag political earthquake. Indeed, markets are tumbling, and thank you very much, Pim, Thank you, Kathleen, the DAL, the SMPNAZDAK all declining U S stocks, joining a sell off in global risk assets on speculation that the UK decision to leave the European Union would hamper worldwide growth. The victory of the Leave campaign stunned many investors who put wagers on risk your assets over the past week, as book makers odds suggested the chance of

a so called Brexit was less than one in four. Well, now that the vote is done, Jacob Kirkergard, senior fellow at the Peterson Institute for International Economics, is now the Britain has voted to leave, don't let the door you know the rest. I certainly believe that it should be handed as quickly as possible because their long word draws on uncertainty will weigh on not just the UK economy,

but on the entire European economy. Uh and I think, quite frankly believe that the once again David Cameron has put basically conservative party politics over the broader destiny of European integration, which is something that isn't gonna endear him very much to the other leaders that he's going to be meeting with in just a few days and We'll have more coming up in just a moment on what's

next for the United Kingdom post Brexit. Here's where we stand in terms of US equities bouncing along the bottom right now, with the SMP down seventy two thousand, forty two, a drop of three point three percent down, industrials down five hundred seventy eight, a drop there of three point two percent, gold surging four point four percent, and a two thirty two on Wall Street. Now, let's take a look at other news from around the world. Thank you,

Charlie from the Bloomberg Newsroom. I'm Julie Hyman. President Obama reacting moments ago to the British vote to leave the European Union. I do think that yesterday's vote speaks to the ongoing changes and challenges that are raised by globalization. But while the UK's relationship where the EU will change, one thing that will not change is the special relationship

that exists between our two nations. Donald Trump is calling the British vote a positive one, despite concern and financial markets in Scotland for the opening of a Trump golf course. The likely Republican nominee said he saw parallels between frustrations expressed by British voters. That's really what's happening in the United States, and I think you see that, and that's what's happening in many other places in the world. They're tired of it. They want to take their countries back.

Democratic presumptive nominee Hillary Clinton says we need to respect the choice the United Kingdom has made. Clinton also said our first task has to be to make sure the economic uncertainty created by these events does not hurt working families here in the United States. Scottish First Minister Nicola Sturgeon said it is highly unlikely Scotland will hold a second independence referendum following Britain's decision to withdraw from the EU.

Six of Scottish voters backed remaining in the EU. City officials have slapped the Trump organization with the ten thousand dollar fine after company representatives missed a hearing to resolve zoning violations. A Trump attorney was supposed to attend an administrative hearing yesterday over violations of a special permit, but no one showed up. The Trump executive says the company

is asking for a new hearing. Global News twenty four hours a day, powered by more than twenty six hundred journalists and analysts and more than one twenty countries from the Bloomberg newsroom. I'm Julie Hyman. This is Bloomberg, Charlie, and we thank you. In the SMP, five hundred indecks just turning negative for the year, down point one percent year to date. Down Jones Industrial Average now unchanged year

to date. Recapping the numbers SMP falling seventy two points to two thousand forty one, a drop there of three point four percent. I'm Charlie Pellatar. Brexit coverage continues, and that's a Bloomberg business flash. This is taking stock with Kathleen Hayes and Pim Fox on Bloomberg. Britten's political earthquake has created after shocks, buffeting markets, policymakers, political upheaval in London. The pound now at its lowest level since Prime Minister

David Cameron resigning. Joining us now to put this in perspective, not only what happened, but where we go next. John Michael Thwaite, editor in chief for Bloomberg Editorial and of course a man who knows the UK very well. Yes, well you know this. It's funny even if you're on the side that wanted to leave. Somehow, this doesn't feel like a day when people are waving flags and and celebrating, because even if you wanted to go and imagine you just you, you must feel something kind of somber, and

I think there is that. Actually, what's interesting is even in Boris Johnson, one of the great jokers, you know, he made a very kind of dead pan speech, not least also saying let's not rush into this, Let's do this in three four months time after we've selected a new Tory leader, records him. But then then let's go

and approach Brussels. And there's that side. But I rememb watching the results last night with a young guy who was sort of said he was mildly pro Brexit, and then after once it's sort of sunk in, he's only thought I might lose my job. I might You know that all those things are playing out at the moment, and you even see an attempt to sort of put around the petition to say maybe there should be a

second referendum. All those things are out there at the moment, and people, I think people are still coming to terms with it. Explain if you can what happens next, particularly in terms of Parliament. Yes, I should say what what happens is the referendum has to do with Parliament, so it has to do with the recommendation de Parliament. Parliament then has to vote basically to take file effect what they call Section fifty, which is part of the part

of the European Union's constitution. It basically says, if you want to leave, you know, you apply under this and then there's a two year um negotiating period. Now, the obvious point is that you could start negotiating before you do that, and so what is happening at the moment is Angler Merkel is a bit like a rather angry spouse who's just saying, forget it, let's get a quickie

divorce and get out of this. By contrast, on the other side, you've got, as I said, Boris Johnson and also the general the British thing is no, no, let's let's kind of get an idea where things are and then we're coming. We won't petition until September October, and so you've got this process that could go on to three years and that that actually is in some ways quite worrying because it's over that period that a lot of companies will start to decide is it worth investing

in Britain at this precise moment? Would you buy real estate in London? It could be one of the great buys of our time, but it's it could also be something which everyone thinks is about to go down, and what happens with that uncertainty continues and so on and so on. So how does how is this go with the rest of Europe? Does it do? Do? Do you? Germans? Does do the Germans? And the other The most powerful kind is there to say, well, gosh, I guess we

better like help them. We connact angry, but help this not fall apart and and and enter these negotiations in that spirit or this story that um let's see, it's a senior Spanish minister, according to our Bloomberg News stories, saying that Britain leaving the European Union has opened up a new panorama on the status of Gibraltar. He called

on Britain to enter negotiations on joint sovereignty. I mean there will be a lot of things that suddenly go up in the air against the background of that, because I think you brought her way back in the nineteen seventies. Is one of the issues between Britain and the EU. When when when when Britain joined I think more seriously or or or certainly a bigger issue. Look at what is happening between France and Germany. You know, Germany has tended to take the following attitude that it is more

pro the British view of Europe. Wants reforms, it wants things to get on, it wants to do stuff, and why isn't France doing stuff because it isn't. And Furnish, by contrast, have been slightly, kind of not entirely enthusiastic about the British participation in the EU. I think, by one measure, even more French people wanted the British out

than Britain's wanted the British out. But the French starting point is let's just say goodbye to Britain and get them out and warn other people by treating Britain toughly. We put it that way, But then the question about how much reform goes with that is unclear. On the German side, I think on this thing, they are more likely to be a little bit similar to the French on one thing on the treat them tough, because I think Anglo Merkele's starting point is she doesn't want this

to happen again. And what better way of giving a reason not to do this to the Netherlands, to any of the other people who might go, than for the British to get a conspicuously bad deal. Pick up on that, because the political implications for France with the far right National Front Marine leper is that going is this this vote going to help her campaign very much? So, I

mean she is that. All across Europe you have these parties, some of them on the more extreme side, others increasingly mainstream. She is a good example, you know, she has She is almost certain under current polls to reach the last round of the presidential election in France because she will be that she will be the first candidate, and the general view they have a runoff which they come down

to the two most popular candidates. The general view is that you know, she will get to the vote and whoever gets five or whatever will be the other candidate in a sort of multi party m a multi candidate system. But for her, this backs up her idea that Europe is heading the wrong direction. She's also talking about leaving it. You know this, this is there are a lot of other people out there. The level to which Europe as a whole is coming undone is there. Thank you very

much for spending time with this. John Mickle twaite, editor in chief, Bloomberg Editorial. More Brexit coverage coming up on Bloomberg Radio. It Hampton's Commuter Minute is brought to you by Landrover. Visit your local Tri state area Landrover retailer for special lease and finance offers. Landrover above and beyond