For the first time since triggering a political earthquake that’s shaken Europe’s foundations with his now massively backfired decision to hold a EU membership referendum in 2015, a decision which won him the parliamentary election battle but lost him, and Europe, the war, UK Prime Minister David Cameron is set to face his fellow – and very angry – European Union leaders at what may be Cameron’s last summit (or supper as Bloomberg puts it) in Brussels, even as back in London, the race to succeed him is heating up.
Cameron arriving at the EU summit in the next half hour or so…..
— Laura Kuenssberg (@bbclaurak) June 28, 2016
As BBC puts it, David Cameron wanted to arrive in Brussels triumphant… instead he is coming as a disgraced failure.
“Cameron wanted to come back here today as the man who’d kept the UK in the EU, who’d settled the question that has plagued the UK for decades. And instead, he has to look round the table and say, “I’ve just taken the UK out, with all the consequences that brings”. But of course, these are European leaders, it’s not going to descend into any kind of bickering. I think they’ll all be trying to say, “How do we move forward from here?””
As Bloomberg eloquently adds, Cameron will endure an awkward dinner with his EU cohorts Tuesday after his effort to calm the U.K.’s divided public and soothe investors failed to stop the pound and the country’s biggest banks from getting clobbered. The premier has already announced he will quit after last week’s vote, leaving him little leverage at the table.
His government has signaled it prefers a gradual exit from the EU while the region’s three largest economies are keen to set a timetable to contain the economic damage. Which is contrary to his earlier claims (made when he was confident of Remain winning) that the Article 50 process would be triggered immediately after a Leave vote.
“We don’t know how long he is going to be prime minister for, when a new government could begin to negotiate terms,” said Mark Leonard, director of the European Council on Foreign Relations. “The rest of the EU feel they bent over backwards to accommodate Cameron over the last months and he launched this reckless referendum and lost it so the other EU states are in no mood to do him any favors.”
In Brussels, Cameron will be pressed to give some indication on how he expects the U.K. to trigger Article 50 of the Lisbon Treaty – the mechanism for leaving the EU – and what he thinks Britain’s relationship with the bloc will look like after the divorce, according to diplomats in Brussels.
But the outgoing prime minister has said those details would be up to his successor to hash out, a strategy which Merkel has endorsed in hopes that as the fallout over the Brexit decision settles the UK may collectively change its mind about its depature.
“He’s likely to talk about a number of factors that he thinks were issues in the campaign, and in the debate,” said Helen Bower, Cameron’s spokeswoman. “He will reiterate that Article 50 is a matter for the next prime minister.”
The EU gathering unfurls against a backdrop of market turmoil, with shares in Barclays Plc and Royal Bank of Scotland Group Plc crashing to their lowest level since the financial crisis. Reeling from the referendum outcome, EU leaders are split on how hard to come down on the U.K. In the meantime, Britons have lost any influence they had in the 28-nation bloc while remaining bound by its rules and membership fees for at least two years.
Another point of confusion: who will the UK be negotiating with next:
For now, the U.K. is stuck in a political impasse. Cameron’s Conservative Party said Monday a new leader should be in place by Sept. 2. Some in the EU are holding out hope that if the U.K. waits a long time to activate the exit trigger, the decision to leave might even be reversed, one European diplomat said.
A YouGov poll of Conservative voters for the Times gave Home Secretary Theresa May 31 percent support compared with 24 percent for former London Mayor Boris Johnson, a leading backer of the leave vote.
Chancellor of the Exchequer George Osborne, who was criticized by the pro-Brexit camp for scaremongering over the economy, will not be a candidate. The onetime favorite to succeed Cameron wrote in the Times that “I am not the person to provide the unity my party needs.”
Meanwhile, after digesting the shocking news, the EU has calibrated its response to a U.K. departure. The knee-jerk reaction of some had been that the U.K. should trigger Article 50 as early as this week. German Chancellor Angela Merkel is among those calling for a more thoughtful approach, with two EU diplomats saying the alliance could potentially wait until the end of the year.
“We can’t afford an extended waiting game because that would be bad for the economy of both sides of the EU — the 27 members and Britain,” Merkel said. “But I have a certain level of understanding if Britain takes some time to analyze things first.”
Merkel said the U.K. would need to give its official declaration to exit the bloc before formal negotiations on the terms of its future relationship can begin. In a joint statement with her French and Italian counterparts, she urged the EU summit to “set in motion a process based on a concrete timetable and precise commitments.” Speaking from London, U.S. Secretary of State John Kerry called on EU leaders not to take revenge on Britain and to handle the transition with care.
“While there is some uncertainty in the air, leaders have the ability and responsibility to restore certainty, to make wise choices in the days ahead and that means choices that are, in every way possible, not aimed at retribution, not aimed at anger, but ways that bring people together,” he said.
In short: anyone hoping for a resolution from today’s summit will be disappointed. If anything, prepare for a long, hard slog with elevated volatility, as the market twists and turns on every unexpected political development out of the UK, and any hint that the democratic referendum wave started in Britain has spread to the continent.
via http://ift.tt/2959tE9 Tyler Durden