United Kingdom Faces Uncertainty As It Prepares To Leave European Union
ROBERT SIEGEL, HOST:
A few months ago, if you'd asked people what was the most surprising, disruptive election in the world this year, the answer was obvious - Britain's vote to leave the European Union. Well, perhaps it's been outdone since by our presidential election, but June's referendum in Britain was earthshaking. It placed decades of European integration in doubt. It toppled the prime minister. It drove down the value of the pound, and it promised much uncertainty about the future of the United Kingdom and Europe.
Well, around the time of the Brexit vote, we spoke here with George Parker, the political editor of the Financial Times. And to check on what's happened since, we're calling on him again. Hi.
GEORGE PARKER: Hi.
SIEGEL: Let's start with the basics. The United Kingdom is still in the European Union. When will the actual British exit - the Brexit - take place?
PARKER: Well, the prime minister's going to start the formal divorce talks in March 2017. That's the plan at least. And the idea is that they'll be wrapped up within two years. So by the beginning of April 2019, the U.K. will cease to be a member of the European Union.
SIEGEL: Can the prime minister, Theresa May, negotiate a soft exit that keeps Britain in, say, the customs-free union of the EU but otherwise out of the European Union?
PARKER: Well, initially the rhetoric from the British government was very tough, and it sounded like Britain was heading for quite a hard exit from the EU. But recently, the rhetoric has softened quite a lot. And the shape of Brexit which seems to be emerging, at least from the U.K. perspective, is for a much softer kind of exit which, in terms of trading relations, will try to maintain a lot of what we already have.
The question is whether that's going to be acceptable to our European partners because at the end of the day, there's going to have to be an element of punishment for Britain for leaving the EU so as to encourage other members of the EU not to do the same thing.
SIEGEL: So we don't know whether the ideal exit that British leaders might have in mind will fly with European leaders.
PARKER: Yeah, that's right. I mean what the U.K. government would like to do in an ideal world is they would like to stop being subjects of the European Court of Justice - in other words, to European laws. And it wants to have control back over its own borders in terms of migration.
But beyond that, what it would love to do is to maintain all the best bits of the EU from the British point of view, which is basically free trade and the customs union, which allows goods to cross borders without time-consuming checks. So as Boris Johnson, our foreign secretary, said, we want to have our cake and eat it. And I think that's a proposition which is going to be tested quite sorely in the months to come.
SIEGEL: The Brexit referendum cost Prime Minister David Cameron his job, as you forecast on our program. But his conservative party is still in power. How much has the political landscape of Britain really been altered so far?
PARKER: Well, I mean as you say, the change at the top has been quite stunning. You know, the British government has been really run by David Cameron and his sidekick George Osborne, who was the chancellor of the exchequer since 2010.
They've gone, and in their place has come Theresa May, a prime minister who is austere, very serious and actually probably the best prime minister for the times because the country - whichever side of the debate you were on on Brexit - was traumatized I think by what happened in June. And Theresa May emerged from the wreckage as quite a calming individual. The opinion polls suggest she's very popular with the public at the moment.
But the next year will be a huge test of her abilities. Trying to negotiate this Brexit will be a huge task for any prime minister, particularly one who's quite inexperienced and who frankly doesn't have great personal skills. And diplomatic skills I think will be very important in the next 12 months.
SIEGEL: The morning after the Brexit referendum, I was in the city of London, and I heard people tell me they were just in shock. They couldn't believe what had happened. Have people there and people in British business - have they gotten over the punch in the gut that the Brexit vote was?
PARKER: I think initially people were very worried about what was going to happen. The pound fell off a cliff immediately after the referendum. And people were worried that some of the direst predictions of economic catastrophe made by the British Treasury and the Bank of England were going to materialize. In fact a lot of them haven't. In fact I think the British economy is going to be the fastest-growing economy in the G7 in 2016. So people are relieved that the worst hasn't happened.
But of course we haven't left the European Union yet, and I think the worst could still lie ahead if the negotiations on Brexit start to go wrong in 2017. So I think people are holding their nerves at the moment. Investment is continuing. But if those negotiations go wrong in Brussels in 2017 and it looks like Britain's going to have a hard exit and crash out of the European Union without a new trade deal in place, then I think those jitters could return.
SIEGEL: George Parker, political editor of the Financial Times, thanks for talking with us.
PARKER: A pleasure.
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