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27 June 2016

Investment & Pensions Europe: Jeremy Woolfe: The Brexit 'Schock' in Brussels

The fundamental reaction to the referendum result in Brussels appears to be one of shock. It was more or less completely unexpected. Discussion on the subject, at the previous day’s PensionsEurope annual gathering in Brussels, had been universally optimistic the Remain side would prevail.

And now the question – what will happen in the medium and long term? What EU leaders don’t want, Incerti reports, is long, dragged-out negotiations. Article 50 of the 2009 Lisbon Treaty, they say, should be enacted straight away.

Incerti, at the Centre for European Policy Studies (CEPS), also notes, wryly, that the referendum impact on the descending value of the pound had, already, during the first morning, resulted in the UK’s losing its status as the world’s fifth-largest economy. That honour now goes to France.

Clearly prompted by rage, one reaction to the Leave vote comes from Elmar Brok, a member of the European Parliament. Significantly, he is also president of the Union of European Federalists. The German centre-rightist recommended that EU president Jean-Claude Junker immediately remove Lord Jonathan Hill as the British commissioner for financial services. Brok was by no means alone. In fact Hill, a devoted European, announced the next day that he would stand down. Valdis Dombrovskis, the Latvian commissioner, will take his place.

Zsolt Darvas, a visiting fellow at another think tank, Bruegel, would not exclude the possibility of a second referendum in the UK. This could follow a fury-driven general election later this year. He might agree that forecasts of economic calamities, such as tragic job losses, coming true, could force such a move.

Back to the European Parliament, another MEP, with a less strident line than Brok’s, comes from Green Party member Sven Giegold. This MEP refers to Brexit as “a historic setback for the European Union but not its end”.

However, Giegold goes on to note that, if the UK thinks it can have open access to the single market without taking on its common rules, it would be mistaken. There could be no free movement of capital for the City without free movement for citizens, he warns.

Full article

© IPE International Publishers Ltd.

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