2016-07-14

Theresa May's First Speech As UK Prime Minister, Brexit, The Way Forward

Theresa May's  First Speech As UK Prime Minister:

Video above: Theresa May speaking at No. 10 Downing Street, London, July 13, 2016. May emphasized unity and social justice in her first speech as Prime Minister of the United Kingdom.

David Cameron's last day as UK Prime Minister:

David Cameron was given a rousing send off by MPs in the House of Commons. It was his last ever Prime Minister's Questions (PMQ), and in among the serious stuff - there were plenty of jibes and jokes and a few gentle words of thanks. He said he would miss it. Most importantly, at 3:27 in the video above, David Cameron answers the question from a Scottish MP about David Cameron's advice to his successor, Theresa May, concerning the way forward: 
"My advice to my successor [Theresa May] who is a brilliant negotiator, is that we should try to be as close to the European Union as we can be for the [mutual] benefits of trade, cooperation and security. The [English] Channel will not get any wider once we we leave the European Union, and that is the relationship we should seek."
While the British Pound Sterling (UK currency) has fallen since the Brexit vote on June 23, in relation to the U.S. dollar and Euro, thereby providing incentives for the British tourism industry, foreign investment into the UK, and UK exports, many will be watching what the Bank of England (BoE) does Thursday:

Euro | Pound Sterling Forecast | poundsterlingforecast.com July 13, 2016: "With a rate cut to 0.25% likely either tomorrow or next month and the chance of further Quantitative Easing (QE) being introduced, I expect the recent Sterling recovery to come under further pressure should the scenario unfold as I expect."

However, remember the current interest rate of the BoE is .50, while the European Central Bank (ECB) has resorted to negative interest rates, and currently has an interest rate of -0-% in an attempt to deal with the Eurozone's troubled finances and economy.

Opinion/Analysis: Theresa May would be wise to begin free trade negotiations with nations outside the EU, as soon as possible, with those agreements each having a self-executing "effective date" upon UK's departure from the EU. This would be beneficial for two reasons:
  1. to reset expectations (and fears) away from the EU, and focus on the future and opening of world markets to the UK, including London's role as a global financial center; 
  2. those agreements may become "templates" for the UK-EU agreement. Once the EU sees the "deals" the United Kingdom strikes with nations not in the EU such as Canada, U.S., Australia, New Zealand, China, Norway, and others, it is likely to want equal or even better terms for the EU since the United Kingdom is the world's fifth biggest economy and Germany's third largest export market. Germany's unions and businesses may likely drive the final negotiations, not Juncker et al.
Brexit Calendar--what's ahead: May has said there will be no UK general election “until 2020,” giving her plenty of time as Prime Minister to negotiate a transition and change in relationships between the UK and EU, and the UK and rest of world. Theresa May has also said she won’t trigger Article 50 to begin formal departure from the EU until 2017 at the earliest, and the process could take up to two years to complete. Here are some key dates within the near term:
  • July 18: Vote on the renewal of the UK Trident nuclear deterrent. May has said it would be “sheer madness” to give up the weapons system.
  • July 20: May's first Prime Minister’s Questions time in the House of Commons.
  • July 21: UK Parliament goes on summer recess until Sept. 5.
  • August: European officials go on vacation. May has promised a new government department, led by a pro-Brexit minister, to handle the UK's negotiations with the EU. This could be set up in August. UPDATE*: Theresa May has now announced her Brexit team (see below).
  • September 4-5: G-20 summit in Hangzhou, China. May will meet many global counterparts for the first time.
  • September 16: EU leaders meet without the UK for a summit and to chart the EU’s future direction.
  • October 5: An EU meeting on Afghanistan could be May’s first meeting in Brussels as Prime Minister.
  • November 8: U.S. Presidential election. May is well-positioned to continue the UK-US "special relationship" irrespective of whether Hillary Clinton or Donald Trump is elected.
*UPDATE Brexit means Brexit: Prime Minister Theresa May has handed responsibility for Brexit negotiations to those who campaigned to leave, appointing Boris Johnson as foreign secretary, David Davis as Brexit czar, and Liam Fox as chief of international trade negotiations.
  • Foreign Secretary: Boris Johnson – probably the biggest surprise among the appointments, Johnson, who was born in New York, was a leader of the Brexit Leave Campaign, and is not known for his "diplomatic skills"--he once compared Hillary Clinton, the Democratic Party’s presumptive nominee for President, to “a sadistic nurse in a mental hospital” and said she is “everything I came into politics to oppose.” When Johnson was in charge of the Spectator magazine, an editorial described President George W. Bush as a “cross-eyed Texan warmonger” who “epitomises the arrogance of American foreign policy.” He also compared Russian President Vladimir Putin to Dobby the House Elf (from the Harry Potter films), and called him “a ruthless and manipulative tyrant.” Long before he was elected Mayor of London, Johnson, now 52, became a Euroskeptic during the 1990s through his work as a reporter in Brussels for the Daily Telegraph newspaper. Look out Jean-Claude Juncker! 
  • Brexit Secretary: David Davis  – Davis, a Euroskeptic who has served as a minister of state for Europe and Conservative Party chairman, was appointed “Secretary of State for Exiting the European Union.” 
  • Secretary of State for International Trade: Liam Fox – Fox, a prominent Euroskeptic, will negotiate new trade deals for the United Kingdom, and work closely with Davis.
  • Chancellor of the Exchequer: Philip Hammond – Hammond’s  background is business, working in property, construction and oil and gas. Experienced in negotiating with EU counterparts from his time in the foreign office, he will work closely with Brexit czar Davis;
  • Home Secretary: Amber Rudd - As energy secretary she represented the UK in climate change talks, gaining negotiating experience that will aid her in immigration negotiations. She previously worked in investment banking for JPMorgan and then in venture capital. She was also an aide to former Chancellor George Osborne.
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