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World braces for downside of Britain’s EU verdict
June 24, 2016, 7:21 am

Boats of a flotilla participate in a campaign supporting Britain to leave the European Union in London, Britain, on June 15, 2016 [Xinhua]

Boats of a flotilla participate in a campaign supporting Britain to leave the European Union in London, Britain, on June 15, 2016 [Xinhua]

As results from Thursday’s landmark referendum showed that Britain has voted to leave the European Union, reactions from across the world was sharp.

European Union chief Donald Tusk said on Friday the bloc will meet without Britain at a summit next week to assess its future.

The British Prime Minister David Cameron made a statement on Friday morning saying he would step down in October.

“There should be a new PM in place by the start of the Conservative Party conference in October,” Cameron said.

The British stock market plunged 7.7 per cent, while the German index fell 10 per cent after the UK vote to leave EU.

Japan’s finance minister Taro Aso said he is carefully monitoring market developments and will respond as and when needed in the currency markets.

On Friday morning, Japanese stocks sank, pushing the Nikkei 225 index down more than 8 per cent.

“All countries around the world will have to brace themselves for a period of possible turbulence while being watchful about, and alert to, the referendum’s medium term impacts. As regards, the Indian economy, we are well prepared to deal with the short and medium term consequences of Brexit,” the Indian Finance Minister Arun Jaitley said in a statement on Friday.

A Reuters report said the Bank of Korea was thought to have sold dollars to curb the won’s fall as the local currency dropped.

The Reserve Bank of India also likely sold dollars through state-owned banks to prevent the rupee from falling further.

European Union President Donald Tusk said on Friday morning that the group is “determined to keep our unity at 27.”

Czech Prime Minister Bohuslav Sobotka said the bloc should agree Britain’s leaving “quickly and rationally”.

“The European Union must change quickly,” he said on his Facebook page.

Norwegian Prime Minister Erna Solberg also admitted the EU is facing huge challenges.

“I believe they will listen to the signal from both the British voters and many other voters around Europe who feel that the EU is not providing good enough answers to today’s challenges,” Solberg said.

France’s far right National Front party called for a referendum on European Union membership in France.

“Victory for freedom!” FN chief Marine Le Pen said. “We now need to hold the same referendum in France and in (other) EU countries.”

Meanwhile, ratings agency Standard and Poor’s said Britain’s top-notch “AAA” credit rating is no longer tenable after voters opted to leave the European Union, the Financial Times reported on Friday.

“We think that a AAA-rating is untenable under the circumstances,” Moritz Kraemer, chief ratings officer for S&P, told the FT.

The French government has said the United Kingdom would have to surrender the advantages of European Union membership while choosing to exit the bloc.

“To leave has consequences. Leaving means leaving,” cabinet minister and government spokesman Stephane Le Foll said on France 2 television.

 

TBP and Agencies

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