Saturday, June 25, 2016

Why Cameron Resigned After Britain’s EU Exit
By Mulikat Mukaila
Nigeria Daily Trust
Jun 25 2016 5:00AM

Departure causes global upsets Pound Sterling dips against Naira

After Britain voted to leave the European Union (EU), David Cameron resigned as Prime Minister.

He emotionally fought back tears as he announced his resignation yesterday morning, as his wife Samantha flanked him outside Number 10 Downing Street. He said he accepted the decision of the electorate, which voted by 52 per cent to 48 per cent to leave the EU.

Cameron announced he was standing down, adding: “I will do everything I can in future to help this great country succeed. I think the country requires fresh leadership. I do not think I can be the captain to take the country to its next destination.”

The events followed a turbulent night seeing Remain campaigners confident until the early hours when results showed better-than-expected returns for the Brexit camp. Sizeable wins for David Cameron’s campaign in London and Oxford did little to allay fears that early predictions had been wrong, as the pound began to weaken by 6% by around 1pm.

Even the stock market has been severely affected, with actual repercussions still unfolding. The Pound Sterling was down against every single major currency group as the markets reacted to the result. Reports say many UK holidaymakers travelling abroad will pay more for foreign currency as the pound plunged to its lowest level since 1985.

Reports that global financial markets plunged yesterday as results came out, showed that the pound fell as much as 10 percent against the dollar. There also are fears that the decision could hit investment in the world’s fifth-largest economy, threaten London’s role as a global financial capital and usher in months of political uncertainty. The euro, too, slid 3 percent.

United States President, Barack Obama issued a statement. “The people of the United Kingdom have spoken, and we respect their decision. The special relationship between the United States and the United Kingdom is enduring, and the United Kingdom’s membership in NATO remains a vital cornerstone of U.S. foreign, security, and economic policy.”

Hillary Clinton released the following statement: “We respect the choice the people of the United Kingdom have made. Our first task has to be to make sure that the economic uncertainty created by these events does not hurt working families here in America.”

Around the world, the exit has been causing a ripple effect, seeing the Pound Sterling dipping in many countries, including Nigeria, where it sold for about N520 about two weeks ago, as the Central Bank of Nigeria’s new forex policy saw the British currency dip, but yesterday a pound sold for N490 at Bureau De Change (BDC) markets. A number of BDC owners and experts who spoke to Daily Trust say it happened after the results were announced.

In India, finance minister Arun Jaitley warned that the “full implications for the UK, Europe and the rest of the world are still uncertain”, and  predicted a “period of possible turbulence” in the medium term for the global economy. He added that his country “respects” the referendum’s verdict and said the Indian economy was well “well-prepared” to deal with the economic fallout from Britain’s vote to leave the EU.

The rupee fell sharply yesterday morning, while shares in Indian firms that have high exposure  to the UK such as Tata Motors, which owns Jaguar Land Rover, fell by up to 8 per cent.

Russia’s Vladimir Putin said Britain’s exit from the EU reflects growing concerns about immigration and security, and he condemned Cameron for accusing him of backing Brexit, saying the British prime minister’s warning that leaving the EU would please the Kremlin was “the lowest level” of politics. He added that Brexit would have both “positive and negative” consequences for Russia and the rest of the world, but that he expected markets to stabilise from the initial shock.

The United Kingdom itself could now break apart, with the leader of Scotland - where nearly two-thirds of voters wanted to stay in the EU - saying a new referendum on independence from the rest of Britain was “highly likely”.

Leaving the world’s biggest trading bloc could cost Britain the trade barrier-free single market and means it must seek new trade liaisons with other countries. A poll of economists by Reuters predicted Britain was likelier than not to fall into recession within a year.

The EU, which united a continent of prosperous democracies, faces economic and political damage without Britain, which has the EU’s biggest financial center, a U.N. Security Council veto, a powerful army and nuclear weapons. French Prime Minister Manuel Valls summed it up thus: “It’s an explosive shock. At stake is the break up pure and simple of the union. Now is the time to invent another Europe.”


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