British Prime Minister David Cameron said: “The British government will not be triggering Article 50 at this stage.” He said that Britain would have to establish its new relationship with the European Union before doing so and that it would be up to the next prime minister and cabinet to decide.
“Tomorrow is an opportunity — we are leaving the EU but cannot turn our backs on Europe or the world,” Cameron said.
[Previous story, published at 10:30 a.m. ET]
Not since World War II has Britain faced such an uncertain future.
A vote last week to pull out of the European Union has left Britain with a nasty hangover, sending the currency spiraling, dampening markets, creating a leadership vacuum and triggering talks of Scottish secession from Britain, forcing the government into damage control.
Like the markets Brits are jittery, not knowing who will lead their country when Prime Minister David Cameron steps down in October or whether any of the promises made by the leave camp will even come into fruition.
Leave campaigners claimed, for example, that leaving the European Union would save Britain £350 million a week, money that could be poured into the country’s stretched National Health Service. Now they are saying they can’t guarantee that would actually happen.
In fact, nothing will change until Britain invokes Article 50 of the Lisbon Treaty, which it needs to do to get the ball rolling on its EU divorce. It will need the the British parliament behind it, and with Cameron’s resignation, it is unclear whether he will make the announcement to the EU or leave it to his successor.
German Chancellor Angela Merkel said the EU would not entertain talks until the article was invoked.
“We cannot start some sort of informal talks without having received the notice from Great Britain. This is very clear to me,” she told journalists in Berlin on Monday.
The opposition Labour Party is not doing much better at giving the British people any certainty. Leader Jeremy Corbyn is dealing with his own Brexit crisis, announcing 10 new senior positions Monday after a flurry of resignations over the weekend. The exodus came after he sacked a key party member accused of plotting a coup.
Who’s in charge?
Cameron said he would stay on as prime minister until October to help in the transition. In a cabinet meeting on Monday, he proposed the establishment of a new unit to deal specifically with the country’s EU divorce and advise the new prime minister and a new cabinet.
“This unit will be based in the cabinet office. It will bring together officials from the cabinet office, the [foreign office], the Treasury, and others,” a spokeswoman for the prime minister’s office said.
She said that Oliver Letwin, one of Cameron’s influential policy advisers, would lead the unit.
Letwin is an old friend of Cameron’s from Eton College. Cameron has come under criticism for peppering his cabinet with old school friends from the expensive institution.
‘Open for business’
Leaders are now trying to allay fears that Britain may be heading for recession and are trying to boost confidence in its markets and currency to avoid an economic meltdown.
“No one should doubt our resolve to maintain the fiscal stability we have delivered for this country,” he said. “And to companies, large and small, I would say this: the British economy is fundamentally strong, highly competitive and we are open for business.”
But the shock outcome of the Brexit vote sent European markets into the red on Monday, while the British pound resumed its fall.
The pound was down 3.8% at 1.31 to the dollar and down 2.65% to 1.20 to the euro in afternoon trading.
London’s FTSE 100 was falling more than 2% an hour ahead of the U.S. markets opening.
Former London mayor and prominent leave campaigner Boris Johnson — tipped as a favorite to stand in for Cameron as prime minister — welcomed Osborne’s decision not to make any changes to the budget until after a new prime minister is installed.
“I think it’s very good news that the Chancellor has come out and said some reassuring things to the markets, and it’s clear now that project fear is over — there’s not going to be an emergency budget, people’s pensions are safe, the pound is stable, the markets are stable. I think that’s all very good news,” he said Monday outside his north London home.
But Adam Marshall, Acting Director General of the British Chambers of Commerce, said that businesses wanted a clear timetable for exit.
“While it is prudent for the UK government to delay firing the starting gun on negotiations with the European Union, firms want a clear timetable, and simultaneous action to support the wider economy,” he said.
Labour’s own meltdown
The jockeying for power is not exclusive to Cameron’s Conservative Party. Labour MPs have seized the Brexit turmoil to apparently try and oust leftist party leader Jeremy Corbyn, who has taken the party in a new direction after two consecutive election losses to the Conservatives.
Corbyn is a divisive figure among Labour MPs. His leftist economic vision includes salary caps and nationalization of essential services like public transportation.
But he is popular among Britain’s left. He has brought tens of thousands of new members to the party and an attempt to oust him could easily backfire, as party members across the country could easily vote him back in should his leadership be officially challenged.
Labour MPs argue that Corbyn is popular but not realistically electable, and could keep the party in the political doldrums for years to come.
On Monday, Corbyn announced a new-look “shadow” cabinet, following the resignations of senior party members from their positions.
Britain’s main opposition party typically creates a shadow cabinet mirroring the party in power. Shadow ministers are assigned portfolios, and it is their job to challenge cabinet ministers on specific issues.
It was Shadow Foreign Secretary Hilary Benn who found himself booted from his position after he was accused of being behind the leadership coup against Corbyn, which still appears to be simmering.
Labour confirmed 10 new appointments, including key allies Diane Abbott as shadow health secretary and Emily Thornberry as shadow foreign secretary to replace Benn. While his parliamentary colleagues are set to discuss a no confidence motion against Corbyn, the beleaguered leader has stated that he will stand in any future leadership contests.
“Those who want to change Labour’s leadership will have to stand in a democratic election, in which I will be a candidate,” he said.
Critics within his own party have criticized Corbyn’s lukewarm campaigning for the UK to remain within the EU, and suggest the blame for the country’s exit should at least partially fall on his shoulders.
EU heads meeting Monday
In Berlin on Monday, three leading EU heads of government will huddle — Germany’s Angela Merkel, France’s François Hollande and Italy’s Matteo Renzi.
The three will meet ahead of a major meeting in Brussels on Tuesday and Wednesday, where Europe’s leaders are scrambling to come together on how to respond to the Brexit vote.
The Brussels gathering will bring together the leaders of all 28 EU nations, but Cameron is not expected to attend much of the session. The world will be looking for guidance on the way forward.
U.S. Secretary of State John Kerry is also heading to Brussels for urgent meetings.
Boris Johnson: Time for unity
Writing his first opinion piece in the pro-Leave Telegraph since the so-called “Brexit” poll determined that a majority of voters wished to end the UK’s 43-year membership in the European project, Johnson sought to reassure “Remain” voters and the markets.
“We who are part of this narrow majority must do everything we can to reassure the Remainers,” he wrote.
“We must reach out, we must heal, we must build bridges — because it is clear that some have feelings of dismay, and of loss, and confusion.”
Renewed calls for Scotland to secede
On Sunday she said that she would “of course” ask her party’s members to refuse to give their “legislative consent.” However, it is likely that the UK parliament in Westminster would overrule the decision.
Also on Sunday she said she would initiate talks with Brussels in the coming week about Scotland remaining in the EU.
Earlier she had said it would be “democratically unacceptable” for Scotland to lose its EU membership in the face of an overwhelming Scottish vote to remain and suggested that plans to draw up a second Scottish independence referendum would begin as a result.
Johnson, in his Telegraph piece, dismissed Scottish calls for another referendum, writing that he did not “detect any real appetite to have another one soon,” despite Scotland’s clear desire to remain within Europe.
Global economic shockwaves
The Brexit effects are still being felt around the world. In the U.S., the Dow dropped 225 points after opening and U.S. financial stocks took a hammering.
Europe’s markets were deep in the red. Germany’s DAX dropped 2% while the Irish Stock Exchange took the biggest battering, down a steep 7.5%.
But some markets further afield appear to have weathered the storm. Japan’s Nikkei 225 closed up 2.39%, recovering some of Friday’s steep losses, while Australia’s S&P ASX 200 finished up 0.47%.
“Europe is an important partner of China. China will keep preserving and developing both China-EU and China-UK relations. We hope to see a united and stable EU as well as a stable and prosperous UK.”
CNN’s Steven Jiang in Beijing contributed to this report.
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