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

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

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<v Speaker 1>d C, Bloomber to Boston, Bloomberg twelve hundred to San Francisco,

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<v Speaker 1>Bloomberg to the Country series Exam General one nine and

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<v Speaker 1>around the globe the Bloomberg Radio, Plum, DAP and Bloomberg

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<v Speaker 1>dot Com. This is taking stock a political earthquake. That's

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<v Speaker 1>what Britain's vote to leave the European Union is being

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<v Speaker 1>likened to, with after shocks hitting markets policy makers. In fact,

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<v Speaker 1>it has led Prime Minister David Cameron to resign. I

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<v Speaker 1>want to know now, Pam, what next? What is the

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<v Speaker 1>next step for the for the UK, not just internally

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<v Speaker 1>but externally well internally it would have to be passed

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<v Speaker 1>by Westminster, by Parliament. And are an estimated one hundred

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<v Speaker 1>and sixty of the six hundred and fifty MP's elected

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<v Speaker 1>last year they want Britain to leave. The majority want

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<v Speaker 1>them to stay. So we'll find out more coming up

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<v Speaker 1>right now, let's go to Charlie Pellegan the Bloomberg news

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<v Speaker 1>room with the Bloomberg Business flag political earthquake. Indeed, markets

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<v Speaker 1>are tumbling, and thank you very much, Pim, Thank you, Kathleen,

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<v Speaker 1>the DAL, the SMPNAZDAK all declining U S stocks, joining

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<v Speaker 1>a sell off in global risk assets on speculation that

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<v Speaker 1>the UK decision to leave the European Union would hamper

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<v Speaker 1>worldwide growth. The victory of the Leave campaign stunned many

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<v Speaker 1>investors who put wagers on risk your assets over the

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<v Speaker 1>past week, as book makers odds suggested the chance of

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<v Speaker 1>a so called Brexit was less than one in four. Well,

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<v Speaker 1>now that the vote is done, Jacob Kirkergard, senior fellow

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<v Speaker 1>at the Peterson Institute for International Economics, is now the

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<v Speaker 1>Britain has voted to leave, don't let the door you

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<v Speaker 1>know the rest. I certainly believe that it should be

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<v Speaker 1>handed as quickly as possible because their long word draws

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<v Speaker 1>on uncertainty will weigh on not just the UK economy,

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<v Speaker 1>but on the entire European economy. Uh and I think,

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<v Speaker 1>quite frankly believe that the once again David Cameron has

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<v Speaker 1>put basically conservative party politics over the broader destiny of

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<v Speaker 1>European integration, which is something that isn't gonna endear him

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<v Speaker 1>very much to the other leaders that he's going to

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<v Speaker 1>be meeting with in just a few days and We'll

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<v Speaker 1>have more coming up in just a moment on what's

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<v Speaker 1>next for the United Kingdom post Brexit. Here's where we

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<v Speaker 1>stand in terms of US equities bouncing along the bottom

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<v Speaker 1>right now, with the SMP down seventy two thousand, forty two,

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<v Speaker 1>a drop of three point three percent down, industrials down

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<v Speaker 1>five hundred seventy eight, a drop there of three point

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<v Speaker 1>two percent, gold surging four point four percent, and a

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<v Speaker 1>two thirty two on Wall Street. Now, let's take a

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<v Speaker 1>look at other news from around the world. Thank you,

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<v Speaker 1>Charlie from the Bloomberg Newsroom. I'm Julie Hyman. President Obama

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<v Speaker 1>reacting moments ago to the British vote to leave the

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<v Speaker 1>European Union. I do think that yesterday's vote speaks to

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<v Speaker 1>the ongoing changes and challenges that are raised by globalization.

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<v Speaker 1>But while the UK's relationship where the EU will change,

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<v Speaker 1>one thing that will not change is the special relationship

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<v Speaker 1>that exists between our two nations. Donald Trump is calling

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<v Speaker 1>the British vote a positive one, despite concern and financial

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<v Speaker 1>markets in Scotland for the opening of a Trump golf course.

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<v Speaker 1>The likely Republican nominee said he saw parallels between frustrations

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<v Speaker 1>expressed by British voters. That's really what's happening in the

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<v Speaker 1>United States, and I think you see that, and that's

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<v Speaker 1>what's happening in many other places in the world. They're

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<v Speaker 1>tired of it. They want to take their countries back.

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<v Speaker 1>Democratic presumptive nominee Hillary Clinton says we need to respect

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<v Speaker 1>the choice the United Kingdom has made. Clinton also said

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<v Speaker 1>our first task has to be to make sure the

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<v Speaker 1>economic uncertainty created by these events does not hurt working

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<v Speaker 1>families here in the United States. Scottish First Minister Nicola

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<v Speaker 1>Sturgeon said it is highly unlikely Scotland will hold a

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<v Speaker 1>second independence referendum following Britain's decision to withdraw from the EU.

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<v Speaker 1>Six of Scottish voters backed remaining in the EU. City

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<v Speaker 1>officials have slapped the Trump organization with the ten thousand

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<v Speaker 1>dollar fine after company representatives missed a hearing to resolve

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<v Speaker 1>zoning violations. A Trump attorney was supposed to attend an

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<v Speaker 1>administrative hearing yesterday over violations of a special permit, but

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<v Speaker 1>no one showed up. The Trump executive says the company

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<v Speaker 1>is asking for a new hearing. Global News twenty four

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<v Speaker 1>hours a day, powered by more than twenty six hundred

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<v Speaker 1>journalists and analysts and more than one twenty countries from

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<v Speaker 1>the Bloomberg newsroom. I'm Julie Hyman. This is Bloomberg, Charlie,

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<v Speaker 1>and we thank you. In the SMP, five hundred indecks

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<v Speaker 1>just turning negative for the year, down point one percent

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<v Speaker 1>year to date. Down Jones Industrial Average now unchanged year

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<v Speaker 1>to date. Recapping the numbers SMP falling seventy two points

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<v Speaker 1>to two thousand forty one, a drop there of three

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<v Speaker 1>point four percent. I'm Charlie Pellatar. Brexit coverage continues, and

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<v Speaker 1>that's a Bloomberg business flash. This is taking stock with

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<v Speaker 1>Kathleen Hayes and Pim Fox on Bloomberg. Britten's political earthquake

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<v Speaker 1>has created after shocks, buffeting markets, policymakers, political upheaval in London.

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<v Speaker 1>The pound now at its lowest level since Prime Minister

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<v Speaker 1>David Cameron resigning. Joining us now to put this in perspective,

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<v Speaker 1>not only what happened, but where we go next. John

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<v Speaker 1>Michael Thwaite, editor in chief for Bloomberg Editorial and of

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<v Speaker 1>course a man who knows the UK very well. Yes,

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<v Speaker 1>well you know this. It's funny even if you're on

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<v Speaker 1>the side that wanted to leave. Somehow, this doesn't feel

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<v Speaker 1>like a day when people are waving flags and and celebrating,

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<v Speaker 1>because even if you wanted to go and imagine you

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<v Speaker 1>just you, you must feel something kind of somber, and

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<v Speaker 1>I think there is that. Actually, what's interesting is even

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<v Speaker 1>in Boris Johnson, one of the great jokers, you know,

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<v Speaker 1>he made a very kind of dead pan speech, not

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<v Speaker 1>least also saying let's not rush into this, Let's do

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<v Speaker 1>this in three four months time after we've selected a

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<v Speaker 1>new Tory leader, records him. But then then let's go

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<v Speaker 1>and approach Brussels. And there's that side. But I rememb

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<v Speaker 1>watching the results last night with a young guy who

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<v Speaker 1>was sort of said he was mildly pro Brexit, and

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<v Speaker 1>then after once it's sort of sunk in, he's only

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<v Speaker 1>thought I might lose my job. I might You know

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<v Speaker 1>that all those things are playing out at the moment,

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<v Speaker 1>and you even see an attempt to sort of put

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<v Speaker 1>around the petition to say maybe there should be a

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<v Speaker 1>second referendum. All those things are out there at the moment,

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<v Speaker 1>and people, I think people are still coming to terms

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<v Speaker 1>with it. Explain if you can what happens next, particularly

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<v Speaker 1>in terms of Parliament. Yes, I should say what what

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<v Speaker 1>happens is the referendum has to do with Parliament, so

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<v Speaker 1>it has to do with the recommendation de Parliament. Parliament

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<v Speaker 1>then has to vote basically to take file effect what

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<v Speaker 1>they call Section fifty, which is part of the part

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<v Speaker 1>of the European Union's constitution. It basically says, if you

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<v Speaker 1>want to leave, you know, you apply under this and

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<v Speaker 1>then there's a two year um negotiating period. Now, the

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<v Speaker 1>obvious point is that you could start negotiating before you

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<v Speaker 1>do that, and so what is happening at the moment

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<v Speaker 1>is Angler Merkel is a bit like a rather angry

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<v Speaker 1>spouse who's just saying, forget it, let's get a quickie

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<v Speaker 1>divorce and get out of this. By contrast, on the

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<v Speaker 1>other side, you've got, as I said, Boris Johnson and

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<v Speaker 1>also the general the British thing is no, no, let's

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<v Speaker 1>let's kind of get an idea where things are and

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<v Speaker 1>then we're coming. We won't petition until September October, and

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<v Speaker 1>so you've got this process that could go on to

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<v Speaker 1>three years and that that actually is in some ways

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<v Speaker 1>quite worrying because it's over that period that a lot

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<v Speaker 1>of companies will start to decide is it worth investing

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<v Speaker 1>in Britain at this precise moment? Would you buy real

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<v Speaker 1>estate in London? It could be one of the great

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<v Speaker 1>buys of our time, but it's it could also be

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<v Speaker 1>something which everyone thinks is about to go down, and

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<v Speaker 1>what happens with that uncertainty continues and so on and

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<v Speaker 1>so on. So how does how is this go with

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<v Speaker 1>the rest of Europe? Does it do? Do? Do you? Germans?

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<v Speaker 1>Does do the Germans? And the other The most powerful

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<v Speaker 1>kind is there to say, well, gosh, I guess we

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<v Speaker 1>better like help them. We connact angry, but help this

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<v Speaker 1>not fall apart and and and enter these negotiations in

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<v Speaker 1>that spirit or this story that um let's see, it's

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<v Speaker 1>a senior Spanish minister, according to our Bloomberg News stories,

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<v Speaker 1>saying that Britain leaving the European Union has opened up

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<v Speaker 1>a new panorama on the status of Gibraltar. He called

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<v Speaker 1>on Britain to enter negotiations on joint sovereignty. I mean

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<v Speaker 1>there will be a lot of things that suddenly go

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<v Speaker 1>up in the air against the background of that, because

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<v Speaker 1>I think you brought her way back in the nineteen seventies.

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<v Speaker 1>Is one of the issues between Britain and the EU.

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<v Speaker 1>When when when when Britain joined I think more seriously

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<v Speaker 1>or or or certainly a bigger issue. Look at what

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<v Speaker 1>is happening between France and Germany. You know, Germany has

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<v Speaker 1>tended to take the following attitude that it is more

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<v Speaker 1>pro the British view of Europe. Wants reforms, it wants

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<v Speaker 1>things to get on, it wants to do stuff, and

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<v Speaker 1>why isn't France doing stuff because it isn't. And Furnish,

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<v Speaker 1>by contrast, have been slightly, kind of not entirely enthusiastic

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<v Speaker 1>about the British participation in the EU. I think, by

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<v Speaker 1>one measure, even more French people wanted the British out

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<v Speaker 1>than Britain's wanted the British out. But the French starting

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<v Speaker 1>point is let's just say goodbye to Britain and get

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<v Speaker 1>them out and warn other people by treating Britain toughly.

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<v Speaker 1>We put it that way, But then the question about

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<v Speaker 1>how much reform goes with that is unclear. On the

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<v Speaker 1>German side, I think on this thing, they are more

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<v Speaker 1>likely to be a little bit similar to the French

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<v Speaker 1>on one thing on the treat them tough, because I

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<v Speaker 1>think Anglo Merkele's starting point is she doesn't want this

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<v Speaker 1>to happen again. And what better way of giving a

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<v Speaker 1>reason not to do this to the Netherlands, to any

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<v Speaker 1>of the other people who might go, than for the

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<v Speaker 1>British to get a conspicuously bad deal. Pick up on that,

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<v Speaker 1>because the political implications for France with the far right

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<v Speaker 1>National Front Marine leper is that going is this this

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<v Speaker 1>vote going to help her campaign very much? So, I

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<v Speaker 1>mean she is that. All across Europe you have these parties,

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<v Speaker 1>some of them on the more extreme side, others increasingly mainstream.

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<v Speaker 1>She is a good example, you know, she has She

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<v Speaker 1>is almost certain under current polls to reach the last

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<v Speaker 1>round of the presidential election in France because she will

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<v Speaker 1>be that she will be the first candidate, and the

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<v Speaker 1>general view they have a runoff which they come down

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<v Speaker 1>to the two most popular candidates. The general view is

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<v Speaker 1>that you know, she will get to the vote and

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<v Speaker 1>whoever gets five or whatever will be the other candidate

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<v Speaker 1>in a sort of multi party m a multi candidate system.

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<v Speaker 1>But for her, this backs up her idea that Europe

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<v Speaker 1>is heading the wrong direction. She's also talking about leaving it.

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<v Speaker 1>You know this, this is there are a lot of

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<v Speaker 1>other people out there. The level to which Europe as

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<v Speaker 1>a whole is coming undone is there. Thank you very

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<v Speaker 1>much for spending time with this. John Mickle twaite, editor

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<v Speaker 1>in chief, Bloomberg Editorial. More Brexit coverage coming up on

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<v Speaker 1>Bloomberg Radio. It Hampton's Commuter Minute is brought to you

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