EU Council Pressures UK to Depart Swiftly Post 'Brexit' Turbulence
- European Council calls for UK to file Article 50 as soon as possible
- German Chancellor Merkel says EU-UK relationship outcome not yet clear
- Summit hears ECB warning of ‘serious’ repercussions of Brexit on Europe
The European Council’s press conference made clear the EU is ready to start the divorce process with the United Kingdom as they concluded the opening day of their June meeting. Uncertainty remains the central tenet. While the statements were conducted with a sense of lament, members of the EU council urged the UK to evoke the article 50 procedure to start the EU withdrawal as soon as possible and have reiterated that there will be no informal negotiations before the notification has been delivered.
Germany’s Chancellor Angela Merkel delivered a warning to the United Kingdom that they would not be able to choose the benefits of their future relationship while avoiding the costs. Chancellor Merkel spoke to the German Parliament ahead of the European Union Council meeting, stating the UK would have to share the obligations of membership in order to be able to gain full access to the single market of goods and services. French President Hollande echoed those sentiments saying the UK will not have access to the single market without freedom of movement or budget participation.
With the warnings, the policy officials attempted to keep an optimistic tone. European Commission President Jean-Claude Juncker said he was encouraged after the meeting with EU leaders while Hollande said the Euro would not face any difficulty after the Brexit vote. However, the concerns were clearly on display. Merkel relayed the ECB’s evaluation of the negative economic impact of the Brexit on Europe while Denmark Prime Minister Anders Fogh Rasmussen described the evaluation as being ‘serious’.
While the market was little-changed from today’s comments, another day of meetings remain. The markets’ touchy disposition since last week’s blood-letting means it remains a potent source of potential event risk. As continuing uncertainty about how detrimental this decision will be to the UK and EU respectively, the Brexit aftermath should remain the central focus for near-term risk.
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