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Early Start with John Berman and Zoraida Sambolin

U.K. Votes To Leave European Union; Cameron To Resign After Brexit Vote; Donald Trump In Scotland To Visit Golf Courses; Trump Calls Brexit Vote "A Great Thing"; Pound Tumbles Against The Dollar; European Markets Down On Brexit Vote; Betting On Next British P.M. Aired 5:30-6a ET

Aired June 24, 2016 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[05:30:00] MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think that's the main concern here with the Russians. With the U.K. no longer in the European Union, once it withdraws from it, it's been one of those most vocal voices in promoting these economic sanctions imposed against Russia after the interventions in Ukraine and the annexation of Crimea.

Without the U.K. there, the Russian hope is that the European Union's will to keep those sanctions in place will erode, and so that seems a positive here by the officials that have spoken on it so far of the European Union and Britain.

RICHARD QUEST, CNN HOST: Matthew Chance in Moscow. The coverage continues -- there's so many strands. We'll have more as we continue throughout the morning. Good morning to you.

[05:30:45]

(COMMERCIAL BREAK)

[05:33:10] HANNAH VAUGHAN JONES, CNN HOST: Well, welcome back to CNN's special coverage of the U.K.'s referendum results. I'm Hannah Vaughan Jones for you here in London.

QUEST: I'm Richard Quest. The night has given way to the dawn, which gives us the morning and an historic moment as the U.K. votes -- the first time that a member of the European Union has decided that it's time to leave and voted that they would no longer wish to be a member.

JONES: It is, of course, a pivotal day for the U.K. and, of course, for all of Europe as well. David Cameron, the British prime minister, says he will resign after British voters chose to leave the E.U. Cameron didn't give an exact schedule for his exit. We are expecting it to be in around three months' time at the start of the party conference season in the autumn. Cameron said it wouldn't be right for him to steer the ship onto the next direction, as well, into the next destination. So that's where we stand at the moment.

And we do have some more breaking news for you this morning. Donald Trump has arrived in Scotland. He arrived by helicopter and he's been weighing in on this referendum result as well. He congratulated the people of Britain on what he called the historic results and had some controversial comments as well. Just listen in.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESUMPTIVE REPUBLICAN NOMINEE: Well, that's too bad, but I think it's a great thing that's happened and it's an amazing vote. It's very historic. I'm very happy.

(END VIDEO CLIP)

QUEST: Amazing vote, great thing, I'm very happy.

JONES: Yes, controversial in itself, not least because Donald Trump is in Scotland but also because, of course, Scotland voted overwhelmingly to remain within the European Union and Mr. Trump's comments go completely against that.

Let's get to our Sara Murray who's been following Mr. Trump during his visit to Scotland. Sara, his comments presumably not going down all that well north of the border.

[05:35:00] SARA MURRAY, CNN POLITICS REPORTER: Yes, it will be very interesting to see how people here react because as you say, Scotland voted to stay, not to leave. And yet, Donald Trump is going to be coming out here, he's going to be holding a press conference at his golf course here at Trump Turnberry, where we expect to hear more of what you just heard from him

This idea, that it was a great idea. That the Brexit was the right move. That it was good for the country. And when he spoke to reporters earlier you could see he was sort of associating the Brexit with his own campaign. He said people are angry. Whether it is in the U.K., whether it is in Britain, whether it is in the United States people are angry at elite institutions. They're angry at their political leaders and they're ready for a change.

But, the other thing that makes Donald Trump's trip here so different from what we've seen from previous presidential candidates is even though he is here in Scotland on this historic day he's not planning on meeting with any political leaders. That's nowhere in his schedule.

In fact, he's going to be visiting a number of his properties. He's supposed to be doing a ribbon cutting here. He's talking to reporters but really nothing overtly political on his schedule although, as you said, we expect his comments here will certainly make waves.

JONES: And, Sara, of course there's presumably as well some criticism from both sides, both his supporters and his opponents. The fact that he's out of the U.S. and he's not talking politics. He's actually -- he's pushing his own personal business interests.

MURRAY: Yes, this is something we have seen from Donald Trump time and time again. I can't tell you the number of Donald Trump properties I have visited you guys from. He tends to hold these as backdrops for his campaign events, for his press conferences. Now, we know in some ways his personal brand has taken a hit during

this campaign. We've seen some corporate sponsors leave him behind. But he's also been able to showcase his properties -- essentially use them as free publicity. And he's funneled a lot of his own campaign money to pay for rent and to pay for office space, and even to pay for Trump wine -- so, into his own enterprises.

And we recently did a new CNN poll that shows seven out of 10 American voters believe that Donald Trump should be severing ties with his business interests. That he should not be running a company and campaigning for president at the same time but at least, at this point, there's no sign that Trump is stepping down.

JONES: Sara Murray, we appreciate it there, live for us in Turnberry in Ayrshire, Scotland. Thank you.

QUEST: The political consequences of the vote to leave. Rodney Barker joins me now. Professor of government at the London School of Economics. Well, the first political machination, of course, is the P.M.'s gone. Was that -- I suspect, looking at the vote and looking at the way the night went, that was inevitable.

RODNEY BARKER, PROFESSOR OF GOVERNMENT, LONDON SCHOOL OF ECONOMICS: I think it -- well, nothing was inevitable but it was -- it was probable. And, of course, he hasn't quite gone. He's going to go, which means weeks, if not months, of uncertainty -- more uncertainty for the conservative party.

QUEST: But he was right when he says there has to be a moment of stability. That the ship has to be righted before he can actually -- the captain can get off the ship.

BARKER: Yes, an unfortunate metaphor because ships also head for reefs, and I think the government and the party have one or two rather difficult things to negotiate.

QUEST: So, let's break this into two specific areas. Behind you there's a map that you can see, that's over there, of the vote. Scotland, I'm -- you know, we've already heard from Nicola Sturgeon. She will -- there will always certain to be now a second referendum, whether it's next year or in the near future.

BARKER: Yes, and Donald Trump, in his statement, showed a lack of political judgment in saying that the British people have decided. Of course, the British people have not decided to leave the European Union. The people of England and Wales have. The people of Northern Ireland have decided to stay. The people have Scotland have decided to stay. The people of London --

QUEST: Well, that's a wonderful piece of sophistry if you -- that's a wonderful piece of sophistry if you choose to break the United Kingdom of Great Britain-Northern Ireland into the four constituent parts, but it was a national referendum.

BARKER: Well, try that one in Glasgow or Edinburgh. The title is the United Kingdom, united in separate bits. And one of the results of the vote yesterday will, I think, be to increase the instability of the United Kingdom.

QUEST: Right, but if Scotland goes for -- pushes hard for a second referendum, do you think Northern Ireland, which has exactly the same -- I'm looking at the map now for Northern Ireland. All counties -- the counting areas -- voted to remain. It's pretty hard to give Scotland it and not give Ireland the same one, surely, even though there are huge political differences in the argument.

BARKER: Well, it's difficult in theory but not difficult in practice because in practice all solutions are a bit messy, and what happens in Northern Ireland, I think, is anybody's guess at the moment.

QUEST: How difficult will the negotiation with Europe be? This morning I've heard talk -- you know, everybody's saying we want a clean negotiation, we want a fast negotiation, a rational negotiation, and if all of that happens then is should be businesslike and efficient and it should be fair on both sides. But I'm guessing you don't think it will be.

BARKER: It depends who does it.

QUEST: Well, the commission does it.

[05:40:00] BARKER: On our side, I meant. Theresa May might give you one outcome, Boris would give you a rather different one.

QUEST: But they have to negotiate this in a timely fashion.

BARKER: They do, indeed, yes, yes. And that will mean several more years of uncertainty. Several more years of dodgy stock markets, insecure banks, shaky pound.

JONES: Two years it could be, as well. Two years, they say, for trade deals to be renegotiated and for the actual full exit, Brexit, to actually take place.

BARKER: Indeed.

JONES: It's a long time of instability.

BARKER: And quite apart from that, all these things take much longer than that in order to settle in and to become workable ways of living.

QUEST: Thank you, sir. Thank you. Forgive me, I was just looking to see this -- the impact on Greece. Brexit on Grexit will be small and limited says the Bank of Greece sources -- countries buffered by capital controls. They've still got many of the capital controls in place, but a small limited effect on Greece.

JONES: We are awaiting a press conference, we understand, from Francois Hollande, the French president. That's supposed to be in the next half hour or so. But in the meantime let's go to Paris. CNN's Jim Bitterman is there for us now. Jim, how have the French been reacting to this referendum result?

JIM BITTERMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, one of the first people to react here was Marine Le Pen, the leader of the Front National Party, who tweeted just hours after the election results had become clear, that she believed that France should have a Frexit, a French exit from the European Union.

And now, she's just had a news conference within the last few minutes here and she says the British have given the French an excellent lesson on democracy. They led a brave Brexit campaign, she said. And she said it legitimizes the debate in France about whether France should be a member of the European Union. And she said a French referendum is a democratic necessity.

So, that's the kind of thing you're hearing from the right. And I remind you that Front National came in third in the elections here for president in 2012. So there is a good, reasonable chance that some of her opinions will have some traction here. I should also say that on the left here, on the far left, there has also been calls for a Frexit, a French debate and a French referendum on an exit from the European Union.

There is an emergency meeting going on right now that you talked about, I think, earlier. Francois Hollande is meeting with his top cabinet ministers. He was supposed to meet this morning with just some minor cabinet ministers but he's called everybody in -- the foreign minister and a number of others -- economics minister and others to talk over what this means for France. And he's going to come out and apparently going to give a bit of a heads up on what the thinking is among the French.

There's also something that's going to be highlighted tomorrow and that is the original six founding members of the European Union are going to be sending their foreign ministers to Berlin tomorrow and they're going to be talking about what all this means.

These are the original six who began the European Union many, many years ago and, in fact, they'll have quite a good deal to say about what the European Union should take as a message from this election that's taken place in Britain -- Hannah and Richard.

JONES: Jim, we appreciate it. Jim Bitterman there, live for us in Paris. And we will, of course, take you straight back to Paris as soon as we hear from the French president, Francois Hollande, who will be reacting to the public reaction to this E.U. referendum result here in the U.K.

In the meantime, Richard and I are going to take a quick break and we'll be back with you in a few moments.

[05:43:55]

(COMMERCIAL BREAK)

[05:45:30] QUEST: It was quite remarkable as the night went on. We saw the pound when it looked as if remain was going to win the night in the very early days. We say the pound go up to 1.50 against the dollar. And then there's the truth as the night became clear it completely reversed and went down to 1.33. Now holding steady, down eight percent or so at 1.3889. This is the lowest level since 1985 and it is the largest one-day fall in history, or at least it was a couple of hours ago.

JONES: And stock markets across Europe, as well, have all reacted with alarm, as well. We did see some fluctuation in prices in the aftermath of Mark Carney, the Bank of England governor who came out just a couple of hours ago to say that the Bank of England would take all necessary steps to meet its responsibilities for monetary and financial stability. Saying some 250 billion pounds of additional funds would be made available. Saying, effectively, that the Bank of England is prepared to flood the market where necessary.

QUEST: All right, let's talk about the FTSE because earlier in the day Barclays was off some 28 percent. It's now down -- Barclays is off 12 percent. Barratt Developments, which is the housebuilders, is still off 20-odd percent. EasyJet, which has large European operations, is down 16 percent.

Nina dos Santos, an IAG owner of British Airways and Iberia, says he doesn't see any major effect at the moment. But, Vodafone has put out a statement saying that it's too soon to discuss the domicile of the company's headquarters. So, company after company is now rejigging themselves.

NINA DOS SANTOS, EUROPE EDITOR, "CNN MONEY": Yes, and Vodafone's a classic example of a company that is run by a European, Vittorio Colao. An Italian is at the helm of Vodafone. One of those very, very able people who've come to the E.U., who live in London, run a big U.K. firm, who have been very much the types of people who've arrived in 43 years that the U.K.'s been part of the European Union.

And across the city of London, where I am here at the trading floor of Panmure Gordon, which is a brokerage, you're hearing time and time again people saying well look, know know, there's a lot of people from the E.U. who live and work in the city of London make it the vibrant hub that it is.

And there's a lot of questioning about whether or not big firms will relocate from these shores to Frankfurt, maybe Paris. Also the Republic of Ireland has a big financial system. Even Edinburgh has a financial system, Richard, as you well know. And the future of the union could be at stake after this historic vote.

Let's hone right in on the FTSE 100 because, obviously, it's the 100 top biggest blue chip companies in this country. FTSE 100 seems to have found a bit of a flaw down around about four and one-half of one percent. That's down about 300-odd points, but I should point out that every time we have a 100-point fall in the FTSE, around about 25 billion pounds, or $37 billion, is wiped off of the market value of some of these stocks.

At one point the London FTSE 100, when it opened, was down in excess of eight percent, working off $130 billion off of equities here. And then, you've also got to factor in the falling British pound which makes some of these equities worth less if you translate them into dollar terms. And foreign exchange is also the backdrop to what's happening here, Richard. The pound does also seem to have found a little bit of stability at around about 1.38. At one point it was at 1.34.

But we should also point out that people across these kind of trading floors are going to be in for a very, very turbulent week-end as it starts to become clear how exactly Europe will be responding as you've got these big E.U.-wide meetings taking place in the midway through next week. How will Europe respond? Will they play hardball with the U.K.? How will the leadership challenge in the wake of David Cameron pan out?

Some people here are telling me that well look, there perhaps is a slight silver lining in this and it's that if Theresa May, who is famously in the remain camp up until this Brexit referendum -- if she emerges as a potential leader could that be the kind of olive branch that Europe needs?

So there's so many more questions here but at the moment, yes, markets really down. We look at the Dow Jones Industrial futures over stateside, just a few hours before the opening bell rings there -- they're down a couple of hundred points, but not as much as the futures markets were indicating just a couple of hours ago.

QUEST: Nina dos Santos is at the trading floor this morning.

[05:50:00] JONES: And, Nina, they're asking what will Europe do next? How will Europe respond? Let's cross over now to Brussels, the home, of course, of the European Union. Our Erin McLaughlin is there for us now live. Erin, are they particularly worried there about a domino effect?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: They are, Hannah, and what we're waiting for right now here in Brussels is to hear more reaction from E.U. leaders, specifically to Prime Minster David Cameron's announcement that he intends to resign in October. Up until this point the reaction, for the most part, has been statements of resilience, perhaps summed up by the words of the E.U. council president, Donald Tusk, who said "What doesn't kill you makes you stronger."

We also heard from the president of the European Parliament, calling for a speedy and clear exit negotiation. I've been speaking to senior diplomats here -- one diplomat telling me that not to expect any niceties in those negotiations. That no E.U. leader here wants to make a Brexit look like an attractive option because they are concerned about contagion.

And now, when you couple that with the fact that the E.U. does not know who they are going to be negotiating with -- who the next British prime minister will be. If it is a leader from the leave campaign, that's potentially problematic considering that kind of thinking is really seen by many to be a mortal threat to the European project. You can see that there's plenty of uncertainty and the negotiations will be incredibly complex. JONES: Erin, just briefly as well, this three-month resignation -- drawn out resignation of David Cameron -- has that been largely welcomed by European leaders there in Brussels or do they think that that could perhaps add to the instability?

MCLAUGHLIN: Well, that is the key question right now, Hannah, and that we're trying to get answers to. As I said, we're still waiting for that reaction to the prime minister's announcement that he's going to be resigning in October. What we do know so far -- pretty consistently we've heard from E.U. leaders that they want a quick and speedy negotiation.

QUEST: Erin McLaughlin, thank you. Erin's in Brussels. The bookies have Boris Johnson as the overwhelming favorite to take over as the prime minister of the U.K. The former London mayor is the leading leave campaigner. It's five to four odds on to succeed David Cameron according to Paddy Power.

JONES: Well, the second favorite is the home secretary, Theresa May. She's at five to two on odds. And then we've got Michael Gove at five to one -- the justice secretary, former education secretary, as well.

QUEST: As we come towards the end of this hour we return to Downing Street and Max Foster, our London correspondent, is there. It says, Max, that the only reason the British government called this referendum was firstly, to appease and to get their own side off their back. To stop the warfare in the Tory Party. But also, because Cameron never thought he'd have to do it. He expected to have -- if he won the election to have to -- last year -- to go into coalition. How true is that or is it just myth?

MAX FOSTER, CNN LONDON CORRESPONDENT: I think, ultimately, whatever was said before -- whatever the situation was before the election -- after the election he had to somehow heal that rift within his own party and he took a big political gamble and it was to say right, let's deal with this once and for all. Let's ask the British people what they want. And this is the result he got here. He had to fall on the sword. It was -- if he didn't go today, he'd have to go another day. He thought I'm just going to do it now.

The big question now is how this party, how this government moves on from here, which is why we need to hear from Boris Johnson. He's now, clearly, the frontrunner to take over from David Cameron. Michael Gove, of course, was very senior in that leave campaign, as well. So what do they both see as the future of this party and how are they going to bring their party together because in many ways the splits have been exacerbated.

Also, how are they going to bring the country together because what we've learned is the people have questioned everything about Britishness as a result of this? They've found their own identity by going leave or remain and it doesn't go along party lines.

So how is Boris Johnson possibly going to bring the country together again, work on policies which he believes in, at the same time is extricating the United Kingdom from the European system, which is pretty much going to take up all of Whitehall's (ph) time over the next couple of years? It's such a complex task and Parliament is going to be dealing with that, as well, when it could be dealing with more pressing problems -- arguably, the nation's problems.

[05:55:00] JONES: And Max, Theresa May, the home secretary, she's remained largely quiet, albeit on the remain side of the campaign over the course of the last couple of months, and that she has long been named as someone who might be a future party leader -- a future prime minister, as well.

The odds are largely in her favor behind Boris Johnson, albeit. And tell us a little bit more about her, particularly because as home secretary, of course, she's largely in control of our borders as well, which is such a crucial issue in this referendum.

FOSTER: Yes, a very powerful figure. A very senior figure. And as you say, she was part of that remain camp. And the theory was, very early on in this campaign, that Boris Johnson, by going for the leave vote, could potentially take out not just the prime minister and George Osborne, but also Theresa May. And then he could have a sort of clean sweep straight into Downing Street, behind me.

Actually, Theresa May is hanging in there and she looks like she will be a contender for that position. And we're already seeing some sort of briefings behind the scenes about various other members of the Conservative Party lining up for that leadership. It's not really a challenge, but to take over the leadership of the Tory Party. But it really is all about Boris Johnson setting us all in the way that the whole of the party agrees with.

QUEST: Max, what would you expect the conversation between President Obama and David Cameron to be like when they speak later in the day? The president is on the west coast at the moment but the White House has said the two men will speak briefly. What do you expect?

FOSTER: Well, they can speak pretty freely now, can't they? They're both on the way out so they can say what they really think. It's extraordinary really, but they -- President Obama came over here earlier in the year and he backed David Cameron's campaign very clearly, very eloquently. He was very much on David Cameron's side so it's going to be sympathy all around. It's a pat on the back. There's no great political future together but they can talk to each other as mates and say we did our best.

QUEST: Max Foster, who is at Downing Street for us this morning as we come towards the end of our coverage tonight. You're watching CNN's special coverage of the U.K.'s decision to leave the European Union. A decision quite remarkable. It's unique, it has implications and ramifications around the world.

JONES: For our international viewers all of our coverage continues after a short break. And for our viewers in the United States, "NEW DAY" begins right now. You've been watching special coverage of this historic moment here.

UNIDENTIFIED MALE: This is CNN breaking news.

ALISYN CAMEROTA, CNN HOST: Good morning, everyone. Welcome to your new day. We do have major breaking news this morning. The United Kingdom votes to leave the European Union. It's a stunning decision and it is already having a huge impact all over the world. Global markets are plunging on news of this. Wall Street is bracing for the same.

CHRIS CUOMO, CNN HOST: Well, it is a very tough combination for the markets. It was a surprise and it now introduces uncertainty so you're going to see volatility, not just today. There's also the political impact. Britain's prime minister, David Cameron, swiftly announcing he will resign. The battle over immigration was the center of this vote, drawing parallels to the race for the White House here in the U.S.

And speaking of that, who happens to be in Scotland right now? Donald Trump. He's expected to speak at any moment. He's loving the Brexit vote. He's been tweeting all morning. He certainly sees the parallels. He's saying they took their country back the way we will in the U.S. "No games" was one of his most recent tweets. When he speaks we're going to show you what his remarks are on this.

We have the story covered the way only CNN can. Let's start with senior international correspondent, Clarissa Ward. She's live at 10 Downing Street in London -- Clarissa.

CLARISSA WARD, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Chris. Well, walking around the streets of London today talking to the people of this country you hear the same words over and over again. Astonishing, momentous, shocking, surreal. Britons and, indeed, the rest of the world woke up this morning to the realization that this is a very divided country and now everyone is asking themselves the question, what comes next?

(BEGIN VIDEOTAPE)

WARD: A shocking and historic decision. The United Kingdom voting to withdraw from the European Union.

DAVID CAMERON, BRITISH PRIME MINSTER: I love this country and I feel honored to have served it. And I will do everything I can in the future to help this great country succeed.

WARD: British Prime Minister David Cameron, who opposed the exit, issuing some stunning news of his own, pledging to step down.

CAMERON: A negotiation with the European Union will need to begin under a new prime minister.

WARD: The Brexit causing major ripple effects around the world, rattling markets and raising complicated questions about trade, travel, and immigration in the E.U.'s 28-country block. The U.K. is split in its decision. Scottish voters overwhelmingly voted to remain and English voters, who mostly supported the exit, apart from London, the capital of the U.K. AARON BANKS, CO-FOUNDER OF LEAVE.EU: Well, I guess it's maybe the same in America. The Trump style, the haves and have nots, and I think that's what's playing out now. There's been, I think, is why a huge anti-political result.

WARD: A key motivation behind the leave --