Wednesday, 29 June 2016

EU Leaders Vow New Priorities After Brexit Vote

In World Economy News 29/06/2016

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The leaders of France, Germany and Italy pledged to set new policy priorities for the European Union by September and implement projects to increase economic growth and security in a bid to prop up flagging popular support for the bloc after the U.K. voted to leave.
The EU leaders also said the bloc’s 27 other member states wouldn’t hold negotiations about the outlines of the U.K.’s future relation with the EU until London formally notified the bloc of its intention to leave.
“Until this has happened, no further steps can be taken,” German Chancellor Angela Merkel told a joint press conference in Berlin with Italian Premier Matteo Renzi and French President Franç ois Hollande ahead of a dinner at the chancellery.
The insistence that negotiations about a new partnership can’t begin until Britain invokes Article 50 of the EU Treaties, which kicks off a two-year departure process, is meant to discourage euroskeptic insurgencies in countries ranging from France to the Netherlands and Austria, EU officials and politicians have said.
Mr. Hollande said the British vote meant Europe now needed a renewed sense of unity and purpose and pledged to deliver a package of economic and security measures by September.
“We have to accept the [British] decision but at the same time work on defining what Europe’s new focus should be,” he said. “What happened is very sad but the decision is also a good moment for Europe to start a new page.”
Agreeing on these measures could take time. France and Germany have long clashed over how best to boost growth, create jobs, and tackle immigration and terror. Wolfgang Schä uble, Germany’s powerful finance minister, has already rejected a blueprint for further fiscal integration of the eurozone, unveiled by the French and German foreign ministers this week, as out of touch with the current political reality in the bloc.
The leaders of the EU’s 28 member states?including the U.K.?meet in Brussels on Tuesday for a first exchange about the British referendum and its consequences. London will be excluded from a second round of talks on Wednesday.
Speaking earlier on Friday, Ms. Merkel said she understood Britain needed time to react to last week’s vote but couldn’t leave Europe in limbo for too long. “We mustn’t allow for a drawn-out period of uncertainty,” she said.
The comments reflected the European line that has been crystallizing since Britons voted Thursday to take their country out of the bloc?that while Britain shouldn’t be rushed, uncertainty about its plans couldn’t persist much beyond when a new U.K. leader is expected to be in place. Outgoing Prime Minister David Cameron’s Conservative Party intends to choose a new prime minister by Sept. 2, an official from the Conservative Party said Monday.
Ms. Merkel said it was important to keep the remaining members of the bloc solidly together.
“We must do everything in our power to prevent a strengthening of centrifugal forces,” she said, referring to other countries that might seek to follow the U.K.’s lead.
Speaking in Rome before flying to Berlin, Mr. Renzi said Europe needed to react quickly to the U.K.’s decision and use it as a chance to relaunch the bloc. The Italian premier also called for European partners to focus more on social issues than on bureaucratic ones.
“If we stop being on the defensive, what has happened in the U.K. can become a great opportunity to relaunch Europe,” he added.
Over the weekend, Ms. Merkel rebuked calls from other European politicians to push Britain into immediately invoking article 50 of the EU treaty, which governs how a member state can exit the bloc. And on Saturday, she said she wouldn’t pursue a punitive line in exit talks.
“There is no reason to be particularly nasty during these negotiations. They should be conducted in a rational way,” she said.
Peter Altmaier, Ms. Merkel’s chief of staff, suggested at the weekend that the referendum may not be the last word on Britain’s EU membership.
“Politicians in London should have the possibility to think again about the fallout from an exit,” he told a consortium of German regional newspapers.
In Ireland, Irish Prime Minister Enda Kenny agreed with the EU consensus, saying negotiations should wait until the election of a new prime minister and that the U.K. shouldn’t be punished.
Speaking to lawmakers who were recalled for a special sitting of parliament following the U.K.’s vote Thursday to leave the EU, Mr. Kenny said the “stakes were higher” for Ireland in the coming negotiations because of its close ties with Britain and its shared interest in maintaining peace in Northern Ireland, which is part of the U.K.
“I think that in other governments there is a full understanding that there has been a political earthquake in the U.K., the consequences of which will take some time to work out,” he said.
Paul Hannon and Jenny Gross in London and Giada Zampano in Rome contributed to this article.
Corrections & Amplifications: Prime Minister Enda Kenny said the U.K. shouldn’t be punished for its decision to leave the bloc. An earlier version of this article incorrectly stated he said it should be punished.

Source: Dow Jones