‘Britain must not delay EU exit’

British Prime Minister David Cameron, who announced his resignation after Thursday’s referendum result, said Britain would not make any formal notification before October, once his Conservative Party has chosen his successor. 

Manfred Weber, head of the largest political group in the assembly, the centre-right European People’s Party, called on Cameron to trigger Britain’s exit at an EU summit on Tuesday and to start leave negotiations immediately. “We have the will of the British people on the table,” Weber told reporters, saying it now had to be implemented “and the most important thing is that we do this very quickly.” 

Any EU nation that wants to leave the bloc has two years to negotiate the terms of the divorce, starting from the moment it formally notifies the EU of its intention to exit. But some Brexit supporters suggested London could delay that notification to make time for informal talks on the best possible exit deal. Weber said the EU could not wait for British politicians to squabble over the next prime minister.

The pound today collapsed to a 31-year low and there was pandemonium on currency, equity and oil markets as Britain voted to leave the European Union, fuelling a wave of global uncertainty. Sterling crashed 10 per cent to USD 1.3229 at one point, its weakest level since 1985, while the greenback itself slumped below 100 yen for the first time in two-and-a-half years as traders fled to safety. 

In the weeks leading up to yesterday’s historic vote, there had been widespread warnings that a ‘Brexit’ would cause a rout across global markets that would wipe trillions off valuations, just months after a painful China-fuelled sell-off. The doomsday scenario appeared to be playing out as markets suffered one of their worst days since the 2008 financial crisis after final results confirmed one of the EU’s big three economies would leave the bloc after four decades. Fears are also growing that other EU members will push for referendums, posing the biggest threat to the future of grouping since its inception almost 60 years ago. 

As Brexit roiled financial markets, top industry leaders said India cannot be in a denial mode as the referendum has opened a “Pandora’s box of grave uncertainties” and Indian companies, especially IT sector, will have to rework their strategies for the region.

They also foresaw Indian companies having to shift their operations out of the UK to other European locations. As the USD 108-billion Indian IT sector stared at a phase of uncertainty in near-term, homegrown multinationals Tata and Mahindra groups said access to markets and skilled workforce will remain key issues after Britain voted to exit from the EU, an event which also “highlights the importance of sound risk management for the corporate world.” 

Tata group saw shares of their various firms including Tata Motors, Tata Steel with significant exposure to UK taking a big hit. Exporters feared the turmoil would bring in more currency risks, although rupee depreciation may appear to be good in longer term for those shipping goods overseas.