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Special Coverage Of Britain's Historic Vote To Leave The European Union. Aired 1-2a ET
Aired June 25, 2016 - 01:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[01:00:00]
MAX FOSTER, HOST: Welcome to our viewers in the United States and around the world. This is our special coverage of Britain's historic vote to leave the EU. I'm Max Foster.
BECKY ANDERSON, HOST: I'm Becky Anderson and we'll take a look at the implications of this decision as we continue this hour.
(BEGIN VIDEO CLIP)
ANDERSON: Now, the final tally was close, with the lead camp edging out remain by just a few percentage points. But that hasn't lessened the impact around the globe.
FOSTER: Markets were in a free-fall for a while as investors clambered to deal with the ramifications. But the President of the European Council is urging against overreaction.
DONALD TUSK, PRESIDENT EUROPEAN COUNCIL: It is a historic moment but for sure not a moment for hysterical reactions. I want to reassure everyone that we are prepared also for this negative scenario.
ANDERSON: There's been major political fallout as well. British Prime Minister David Cameron resigned on Friday, saying a new leader should be in place by October.
The EU tries to pick up the pieces before any other members consider their own exit. CNN's international diplomatic editor, Nic Robertson joining us now with more from outside 10 Downing Street.
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ANDERSON: So, Nic, what happens next?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, certainly you're going to have the Europeans trying to manage this situation. You have obviously Robert Tusk there - Donald Tusk there yesterday saying that you know, Europe should be cautious. Angela Merkel said the same thing, you know should be cautious they shouldn't move too quickly with the risk of creating divisions.
(BEGIN VIDEO CLIP) ROBERTSON: Yet the German Justice Minister said Europe needs to act quickly over this issue of Brexit. Marine Le Pen, the French right wing nationalist, Geert Wilders in Holland as well, the right wing nationalist, they're both calling for referendums in their own countries. So the fear of contagion in Europe, you have the Hungarian Foreign Minister yesterday saying that European nations should now listen to their people. That this was a message that they should be better connected with their electorates.
So clearly at a European level, there is a concern about how this is going to be handled, how it's going to be managed. And as we've seen in the differing positions between Merkel and her justice minister, it's not - they, the leaders of Europe are still figuring out how to handle this and internally within their own countries, not as a group of what will now be 27 nations. So I think when we look at the Europe wide perspective here, this is going to be a learning process for everyone, Becky.
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ANDERSON: Not to suggest that the European project is inept, but nobody is going to suggest that it is a roaring success, are they? What is the risk here of a contagion, that despite leaders all calling for calm across the European bloc, that other countries might go the same way?
ROBERTSON: Yes, could it be Greece, could it be Italy, could it be Spain? I mean these are going to be the concerns, the worry for the leadership. And it was interesting yesterday that you know David Cameron not only talked to President Obama, but he talked to the President of the European Commission, the European Council as well. He talked to the President Francois Hollande to Angela Merkel, to Enda Kenny, the Irish Prime Minister, to Matteo Renzi, the Italian Prime Minister.
To Mark Rutte, the Dutch Prime Minister, talked to all of them to reassure them about the steps and measures that he was going to take. Because how Britain handles this, and maybe it won't be David Cameron doing it, and that seems very unlikely, how Britain handles this and manages it and how the Europe - and how the other European leaders handle it and manage it together is going to have a direct implications for what other countries may call for their own referenda on this issue.
There's been - you know we've heard rumoring's and mutterings that perhaps Europe would want to send a very tough message to the British, and to other countries in Europe, not to try to break out of the European Union by setting some very tough conditions as Britain negotiates its way out of the European Union. Of course, this is going to play out over months and years. So it's going to be a longer slow process.
The early indications are Tusk, Merkel, let's just take our time and play it carefully, and watch for the fractures and divisions and let's try and dampen out any fires that might be rising up in other places.
[01:05:07]
ANDERSON: Calm and collected is how Merkel described the reaction she hoped she would see across Europe. All right Nic, thank you for that. Nic Robertson is outside Number 10 for you this morning.
FOSTER: Not so calm and collected on the markets yesterday.
ANDERSON: No.
FOSTER: The global investors, Brexit is not coming cheap. Stocks tumbled worldwide on Friday, as traders began pricing in a new era of market uncertainty.
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ANDERSON: That's right. On Wall Street, the Dow fell more than 600 points. That's more than 3 1/4 percentage. In percentage terms, it's the worst day on Wall Street in ten months. The S&P 500 and the Dow now back in negative territory for the year.
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FOSTER: A similar story here in Europe. U.K. stocks finished Friday session down more than 3 percent.
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FOSTER: German and French stocks suffered far heavier losses though. The British pound plunged to levels not seen since the mid-1980s.
ANDERSON: That's right and it was the banks and the builders certainly in the U.K., banks across Europe that suffered. There were some green arrows. Gold rallied for example over 4 percent, and mining stocks did well as well. And the investors once again flocking to the safe haven of U.S. Treasuries. Despite all of that estimates say that Brexit wiped out an estimated $2 trillion worth of stock market value worldwide.
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FOSTER: After that wild Friday, the Asian markets are in for an uncertain weekend and what could be a rough week ahead. Mallika Kapur is Hong Kong - is in Hong Kong with more. The Asian markets were the first to feel this because the results were coming in as they were open and before Europe was open. Now everyone looking to the Asian opening on Monday because it was hard to make sense of on Friday wasn't it. So how do you think things are going to go as we look ahead to next week?
MALLIKA KAPUR, CNN ASIA CORRESPONDENT: I think the prediction Max is that it will continue to remain volatile for a couple of days at least. You're right, I mean it was a day of extreme volatility here in Asia yesterday.
(BEGIN VIDEO CLIP) KAPUR: And if by looking at the stock market, you know normally the political event tells you what's going to happen in the markets. But yesterday just by reading the market, you know by seeing the graph go up, you knew what was happening in the U.K.. You knew that somebody had voted to leave. And -- but looking at the graph it gave you a clear indication of what was happening politically. There was so much volatility in the markets.
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KAPUR: That is likely to continue for another day or two. But people here are saying that volatility you're seeing, that the panic you're seeing in the currency market and in the stock markets here in Asia will be quite contained to another week or two.
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KAPUR: That's the short-term impact. People here are looking ahead, and wondering how much of an impact this will have, Brexit will have on growth in Asia, on the economies of various countries. And the answer here is that they do expect it to be pretty moderate.
Because if you look at trade between many Asian countries in the U.K. alone in particular, it isn't that much. Overall, regional exports from Asia to the U.K. alone really account for just about 1 percent or less than 1 percent of regional GDP. So it's not that high.
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KAPUR: What will be interesting to keep an eye on is our companies, Asian companies that have a large presence in the U.K., have a lot of exposure to the U.K. alone. And we're looking at some of the large automakers in Japan, companies like Nissan and Toyota, that actually manufacture their cars in the U.K.. Some Indian companies, you know, the Tata Group which owns Jaguar which is also being made in the U.K., and these companies have always used the U.K. as a good access point, as an entryway to the rest of Europe. And we will have to look ahead to see what these countries do now.
And we've actually heard from the Tata Group in India which says that it's time now to review our strategy and we will have to take a look again at access to markets and a skilled work force will remain an important consideration as they go ahead.
So the impact could be felt on companies that have done business and manufacturing in the U.K.. The question is, will they pull out. Will it make more sense for them to manufacture their products somewhere else in Europe. And that is where we could see the real impact. Max?
FOSTER: Okay, we'll have to see. Mallika in Hong Kong, thank you.
ANDERSON: Well many investors and traders are wondering just how bad the markets will get.
(BEGIN VIDEO CLIP) ANDERSON: There are concerns about cash drying up like we saw with the fall on Wall Street and the investment house Lehman Brothers back in 2008. But as Nina Dos Santos found out there may be some financial bright spots in all of this.
NINA DOS SANTOS, CNN MONEY EUORPE EDITOR: So, traders across the City of London, across trading floors like for instance, this one at Panmure Gordon got a real shock when they woke up to find out that overnight the United Kingdom had decided to leave the EU.
This was really a result that people across the financial community were not expecting. They were only pricing in a 20 to 25 percent chance of a Brexit happening.
[01:10:07]
SANTOS: So straight out of the gate, the FTSE 100 fell. The pound actually touched a 30-year low against the U.S. dollar well before equities in London began trading. And we saw markets overnight in Asia literally tumble out of bed. Then the Dow started falling.
So let's talk to some of the people here on this trading floor to find out exactly how concerned they were at that time. What kind of day was it? Is it reminiscent of 2008? Matt, you're a sales trader at Panmure Gordon thanks very much for telling us how things have gone. I mean how would you describe today?
(MATT), SALES TRADER, PANMURE GORDON: It was almost like going back in time, to be perfectly honest with you. To sort of the 2008 time you know the Monday we woke up to find that Lehman had gone bust over the weekend. Unprecedented, well not unprecedented obviously the regular moves overnight. You know it's not very often you come in and see main indexes or indices down sort of 5 percent, 6 percent, 7 percent. We usually take our lead from the states but obviously at that stage when they closed, the result --
SANTOS: Markets were up?
(MATT): Markets were up.
SANTOS: So we should point out that there's buying opportunities when markets fall like this?
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(MATT): Yes. Absolutely there's always opportunity. I mean, some sectors though haven't recovered along with the rest of the market and then you've got U.K. house builders are still down sort of in the region of sort of 20 percent. So that early flurry we saw in a few other things such as continued (inaudible) stuck around that sort of down 20 percent on the day.
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(MATT): U.K. banks, I mean you've got Barclays down 30p today, 16 percent. You've got Lloyd's down 15p, that's 20 percent. SANTOS: Those are big unprecedented moves, at least over the last
seven, eight years during the recovery.
(MATT): Yes, that's what I say. I mean we are - we are back in the realms of sort of 2008. It is a seismic event that doesn't come around every so often. You know, and the fallout is still to be determined. I mean what happens over the next couple of days is in no way a (inaudible) for what will happen over the next six months, a year or two years because no-one knows how this exactly really going to play out in the longer term.
SANTOS: So what's the next plan for yourselves, for traders, for your clients? What are they looking for? Are they going to get any rest over the weekend?
(MATT): I think, well, yes, of course because you know the market will be the market as it is next Monday. There will be sort of a lot of press coverage there'll be a lot of research going on to say this things exposed, that thing's not exposed so stocks election will be the key going forward. Not everything will take part in a rally. Not everything will get sold off.
FOSTER: What a big week they're going into. So what's next and what have they got to focusing on. Well here are a few key post-Brexit events to look to in the days ahead.
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ANDERSON: Shall I help you out?
FOSTER: Go for it.
ANDERSON: In a few hours, foreign ministers from the EU six founding countries, France, Germany, Italy, Belgium, the Netherlands, and Luxembourg are expected to meet in Berlin to discuss the fallout from the vote.
FOSTER: On Monday, Britain's parliament returns after its recess to begin planning its exit from the EU. It is also likely that MPs will start organizing plans for a leadership election to choose the next Prime Minister.
ANDERSON: Also on Monday, German Chancellor Angela Merkel has invited the leaders of France and Italy as well as the European Council President to Berlin to discuss post-Brexit plans.
FOSTER: Then, on Tuesday, a two-day crucial EU summit, scheduled to begin in Brussels. All 28 leaders, that's including David Cameron, will meet to discuss the U.K.'s impending divorce from the European Bloc.
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FOSTER: Presumptive Republican Presidential nominee Donald Trump was in the country as well. Wasn't he?
(BEGIN VIDEO CLIP)
ANDERSON: He was. He received a less than favorable response from the people of Scotland on Brexit. Why? We will explain coming up.
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PATRICK SNELL, CNN WORLD SPORTS: Hi there, I'm Patrick Snell with your world sport headlines. The Rio lab that was supposed to conduct drug testing on Olympic athletes has been suspended.
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SNELL: The World Anti-Doping Agency removing the accreditation of the facility due to for what it calls nonconformity with lab standards. Now according to WADA, the problem involves one unspecified issue and is not known if the lab will be reinstated in time for the games which start on August the 5th.
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SNELL: To the European football championships in France and a race for a place in the last eight is officially on. The tournament surprise package and smallest competing nation, Iceland they don't play until Monday in Nice when they face England.
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SNELL: But three matches on the slate for Saturday, including Wales facing Northern Ireland. A team that they failed to win any of their last eight matches against the Welsh by the way. It's the first time either nation has made it to the knockout round of a major tournament since the 1958 World Cup.
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SNELL: In Saturday's other matches, the 04 finalists, Portugal have won all three of their previous meetings with Croatia.
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SNELL: CR7, Cristiano himself as now become the first person ever to score in four Euros and he's now just one shy of Michel Papini's record hall of nine for France at this tournament.
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SNELL: Also on Saturday it's Switzerland/Holland both countries having reached the knockout stages at this event for the first time. The Swiss have won just once in ten attempts against the Pols.
That's a look at your sports. I'm Patrick Snell.
(BEGIN VIDEO CLIP) BORIS JOHNSON, FORMER LONDON MAYOR: There is simply no need in the 21st century to be part of a federal system of government based in Brussels that has imitated nowhere else on earth. It was a noble idea for its time. It is no longer right for this country.
(END VIDEO CLIP)
ANDERSON: Well world leaders voicing concerns about Britain's historic vote to leave the EU. But the President of the European Commission says the people's decision must be respected.
(BEGIN VIDEO CLIP)
JEAN-CLAUDE JUNKER, PRESIDENT, EUROPEAN COMMISSION: We regret the decision, personally I'm very sad about this decision. But, of course, we have to respect it.
(END VIDEO CLIP)
FOSTER: Well the U.S. President Barack Obama similarly unhappy with the result. But he says his country's alliance with Britain will remain strong.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: While the U.K.'s relationship with the EU will change, one thing that will not change is the special relationship that exists between our two nations. That will endure. The EU will remain one of our indispensable partners.
(END VIDEO CLIP)
ANDERSON: Russia also getting into the mix. Moscow says the vote is already causing problems close to home and for the world at large.
DMITRY MEDVEDEV, RUSSIAN PRIME MINISTER: (As translated) The oil price already fell. The value of the pound, the Euro are also coming under pressure. There is very serious volatility in the commodities and financial markets that of course does not make us happy. There is additional risk for the world economy and for our economy, which is part of the world economy.
(END VIDEO CLIP)
FOSTER: Across the English Channel from here, leaders and people in France are also reacting to their neighbor's vote to leave the EU.
ANDERSON: That's right. CNN's senior international correspondent Jim Bittermann has the details for you from the capital.
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JIM BITTERMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: France was in at the beginning of the European Union and it was clear from President Hollande's reaction he did not want to witness its demise. FRANCOIS HOLLANDE, FRENCH PRESIDENT: (As translated) The choice of the
British is a serious trial for Europe. We need to show our strength, our solidarity, and bring about the necessary responses in order to control the financial and economic risks in the departure of the United Kingdom.
BITTERMANN: But if our President regretted the British vote, the leader of France's extreme right party applauded it and immediately called for a similar referendum in France.
MARINE LE PEN, LEADER "NATIONAL FRONT" IN FRANCE: (As translated) The British people have brought the European people and also the entire world a real and great lesson in democracy. Not to give in to fear, not to give in to the apocalyptic predictions, and they chose a path of freedom.
[01:20:06]
BITTERMANN: But not all agree that the British vote was so positive. Those who have long followed the construction of the European Union were saddened by the result, and understand its implications.
JEAN-CLAUDE TRICHET, FORMER PRESIDENT, EUROPEAN CENTRAL BANK: It's a loss for Europe as a whole. We need more democratic legitimacy, more democratic accountability in Europe at this stage, and it clearly calls for the European parliament to have more say.
BITTERMANN: Some here directly blame the British Prime Minister for what they call a catastrophe.
DOMINIQUE MOISI, FRENCH FOREIGN RELATIONS INSTITUTE: The problem today is not to punish the British for what they did. The problem is to integrate what their message was, and what it means for us.
BITTERMANN: And France, some thought shaking up the EU was a good thing.
UNIDENTIFIED FEMALE: Too ancient. Or should we do kind of a new Europe. I don't really know. I think - I think unity is the answer. I don't think it's going away from Europe so we'll see.
UNIDENTIFIED FEMALE: I think it's a disaster - a disaster for England and a disaster for Europe also. And for French people.
UNIDENTIFIED MALE: I think it's going to be tough for all of us. Even for English people.
BITTERMANN: What comes now is what the European Union has seen a lot of over the past six decades. Meetings, and hand wringing. For or against the EU, you heard people here say the same thing after the British vote. It should be a wakeup call to EU leaders. Now that they're up and awake, the real question is, can they deal with the issues it has raised.
Jim Bittermann, CNN, Paris.
(END VIDEO CLIP)
ANDERSON: Well, the U.K.'s decision to leave the European Union has been compared to the rise of Donald Trump in the U.S. since both highlight voters dissatisfaction with the political establishment.
FOSTER: CNN's Jim Acosta reports on the comparisons and how Trump and Hillary Clinton's campaigns are reacting to it all.
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JIM ACOSTA, CNN SENIOR CORRESPONDENT: Don't look now, but Trumpism just crossed the Atlantic. At least that's how Donald Trump sees Britain's so-called Brexit from the European Union. Even drawing parallels to his own race.
DONALD TRUMP, PRESUMPTIVE REPUBLICAN PRESIDENTIAL NOMINEE: People want to take their country back. They want to have independence in a sense. They want to be able to have a country again. So I think you're going to have this happen more and more. I really believe that. And I think it's happening in the United States.
ACOSTA: At the grand reopening of his Turnberry golf course in Scotland, Trump veiled the vote in the U.K. as vindication of his push against what he considers to be the scourge of open borders. And the presumptive GOP nominee shrugged off the immediate panic in global financial markets as a potential business opportunity for Britain and himself.
TRUMP: When the pound goes down, more people are coming to Turnberry, frankly.
ACOSTA: Trump seemed to welcome the political fallout in London where Prime Minister David Cameron announced he's stepping down. The two leaders had tangled over Trump's proposal to ban Muslims entering the U.S. and shows opposing sides over Brexit.
TRUMP: He was wrong on this, he didn't get the mood of his country right.
ACOSTA: Trump had misread part of Brexit himself, tweeting that Scotland was going wild over the vote. But the return showed Scotland had actually decided to remain in the EU.
TRUMP: The world doesn't listen to him.
ACOSTA: But this was a victory lap for Trump and he slammed President Obama and Hillary Clinton for wading into politics against Brexit.
TRUMP: I thought it was inappropriate and then she doubled down and she did the same thing. And obviously for the 219th time they were wrong.
ACOSTA: Clinton responded to Brexit in a statement saying "This time of uncertainty only underscores the need for calm, experienced leadership in the White House." Her campaign savaged Trump's reaction as frightening. UNIDENTIFIED MALE: "He's not concerned about the American people or
their retirement accounts or their security. He is concerned with himself and that's it.
ACOSTA: Trump says it's his skills as a businessman that the country needs.
TRUMP: We have a problem.
UNIDENTIFIED MALE: People will say the country is not a golf course.
TRUMP: No it's not, but it's you'd be amazed how similar it is. It's called, it's a place that has to be fixed. And there's nobody that knows how to fix things like me.
ACOSTA: As for those Trump's properties, the real estate tycoon said he would continue holding campaign events at venues bearing his name.
TRUMP: My property is -- number one, I have the best properties.
ACOSTA: And said he will give up control over them if he wins the White House.
TRUMP: If I win, I would even though I don't have to do that, I would probably put everything in trust, my children will run it along with my executives.
(END VIDEO CLIP)
FOSTER: Well as Jim was reporting there that Trump was tweeting away as well that Scotland was going wild over the Brexit vote. One problem there though wasn't there?
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FOSTER: Because in reality, Scotland has voted to remain in the EU. Trump's view has put him in hot water with British politicians, and celebrities and they're speaking out on social media.
ANDERSON: That's right, a member of the Scottish parliament, Joan McAlpine quickly replied, "you are in Scotland. We voted remain."
[01:35:00]
FOSTER: Singer songwriter, Lilly Allen favored a more direct approach let's say tweeting "Scotland voted in, you moron."
ANDERSON: Much like comedian Sue Perkins who wrote "Scotland voted remain, you weapons-grade plum."
FOSTER: Meanwhile YouTubers Nicki and Sammy Albon resorted to oh so British humor you could say by tweeting respectively, "I don't know what part of Scotland you're in, pretty sure they're not wild about this."
ANDERSON: "And Scotland was more yellow than your fake tan." Well the leave campaign --
FOSTER: -- maybe you sometimes feel sorry for him the way they lay into him here.
(END VIDEO CLIP)
ANDERSON: The leave camp emerged victorious in Britain and it's a decision that's been decades in the making.
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ANDERSON: We'll explain more after this.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
FOSTER: Well, one thing we can definitely say about this Brexit thing is the reaction has hardly been subdued, let's say. There's been plenty of tongue-in-cheek shots at the country's new direction.
ANDERSON: That's right.
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ANDERSON: The front pages of Europe's newspapers are taking aim. Have a look at these Saturday's Liberation wishes the U.K. good luck and shows that infamous image of Boris Johnson stuck on an Olympic zip line.
Our Nick Glass walks us through the history leading up to the decision.
[01:30:00]
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NICK GLASS, CNN INTERNATIONAL CORRESPONDENT: So, after 43 long years, the restlessness has found a voice. Britain has turned its back on Europe, a seismic decision but a vote that could hardly have been more divisive.
The remain campaign in blue took Scotland, Northern Ireland and London. But the rest of the country went red and voted to leave. A map then of stark division. They call it the United Kingdom, but after this, how united is it. Britain's a split. Those who see themselves as British, those who see themselves as Europeans.
Britain joined the European Union in 1973, when there were just eight other members. The conservative Prime Minister Edward Heath signed the document. Within two years, the new labor government was asking voters to think again, should Britain be in or out.
Throughout the 43 years, the relationship's been intermittently fractious. Britain gained economically, but pored over money and subsidies not least under the leadership of another Conservative Prime Minister, Margaret Thatcher.
In 1992, Britain stayed in the club but declined to join the common currency, the Euro.
DAVID CAMERON, BRITISH PRIME MINISTER: It is time for the British people to have their say. It is time for us to settle this question about Britain and Europe.
GLASS: Cameron's evident motive was to quell the Euro skeptic voices within his own party and make the case against U.K.IP, the far right independence party.
JOHNSON: I will be advocating vote leave or whatever the team is called.
GLASS: Superficially, the referendum was a story of blond ambition. A political heavyweight, the Conservative Boris Johnson coming out for the leave campaign.
The cartoonists just reveled in it. Rolling the dice, vote leave wrestling remain down the hill. Steaming down the line, Boris at the controls of the Brexit express an anxious Cameron roped to the rails.
JOHNSON: I believe that this Thursday could be our country's independence day.
GLASS: As a media story, the focus was the gladiatorial battle between conservative politicians. But the truth is, Brexiteers tapped into something, a genuine anxiety about immigration and this in the middle of the greatest refugee crisis in Europe since 1945.
The campaign was sometimes bitter, sometimes nasty. It stirred social divisions between classes, between town and country, between old and young, between generations of the same family.
Back in 1975, when British voters last put an X to a ballot paper on Europe, there was a resounding yes in favor of membership. 67 percent for, 33 percent against. What a profound shift now. 48.1 percent for staying in, 51.9 percent for leaving.
No one quite knew it until the question was asked. Britain has quietly become utterly polarized over Europe. This referendum has made it abundantly, transparently, divisively clear.
Nick Glass, CNN, London.
(END VIDEO CLIP)
ANDERSON: Well no one knows exactly how this Brexit as it is known will play out. But here's what we do know right now.
(BEGIN VIDEO CLIP)
FOSTER: The outgoing Prime Minister David Cameron said his successor will trigger what's known as Article 50 of the Lisbon Treaty.
ANDERSON: It gives the 27 other EU countries two years to come up with an exit deal. Now the U.K. will not take part in those talks.
FOSTER: If there's no agreement after - two years, EU countries can vote to go into overtime or not. If there's no unanimous decision on that, the U.K. is out of the EU with no deal at all.
(END VIDEO CLIP)
ANDERSON: Sandro Monetti is the Managing Editor of the L.A. Business Journal, a British expat joining us from Los Angeles.
I want to go over some of the numbers here because they're interesting. I want to get your assessment from that part of the world. There was more value wiped off the FTSE and the pound in the first couple of hours of trade on Thursday -- on Friday, sorry than the entire amount of money the U.K. has ever had to pay to be a member of the European Union.
Which really begs the question, what was this all about. We know it wasn't necessarily about the economy. We know the very contentious issue of immigration really played to the fore. And that is an issue that the U.S. will see as contentious and raising its head as you move towards a U.S. election.
How does what happened in the U.K. and to Europe yesterday impact what's going on with you guys?
[01:35:05]
SANDRO MONETTI, MANAGING EDITOR, L.A. BUSINESS JOURNAL: Well, here in Los Angeles we're very used to earthquakes. Now, this was an economic earthquake. And its effects are going to be felt far beyond Britain. You only need to look at the state of the markets to understand that.
To your first point, I'm just glad that I am paid in U.S. dollars now that the pound has gone off the cliff. My fellow ex-pats many of them have been flying their Union Jacks at half-mast today. You know there's nothing more patriotic than a British person who no longer lives in Britain. And a lot of people here have been saying, what about my savings? People here are reacting almost like millionaires who have woken up to find their stock portfolio has been wiped out. Yes, there's a huge reaction here and yes, to your other point, you know this isn't a short-term thing. There's one thing the markets don't like is uncertainty. As your reports have suggested, no one knows what's going to happen and that's not good for the economy.
ANDERSON: Yes. Should there be a capital flight. And I think the risk is lessened at this point. But should there be a capital flight, of course, interest rates might have to be jacked up quite significantly. So those who are living abroad perhaps might want to send their savings back if rates are better. You can get about 0.7 percent as we know at the moment, there's no point sticking your money in the bank.
Listen, what I did think was interesting is Angela Merkel's country, Germany now faces having to pay an extra $2.5 billion into the EU budget annually once Britain has left. And there is this risk of contagion now, people talking about the possibility of a vote, a referendum in Holland, in Hungary, in Finland. Do you see the entire European project unraveling like a woolly jumper at this point?
MONETTI: Absolutely. The British people have fired the first shot in a red, white and blue revolution. There is going to be such a march towards independence now, right around the world. The British people have shown the way.
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MONETTI: And yes, I can very easily see the French going, the Dutch going. EU is you know in a terrible crisis. The first thing they should do is hire a really good press officer and start spinning this, because EU is massively unraveling and the Brits have started it all. And watch the dominos fall.
(END VIDEO CLIP)
ANDERSON: Yes, fascinating. All right. Well we will watch and wait with, I would say a sense of intrepidation, if you're in London over the past 24 hours or so. Certainly this is a city that voted in, of course, and it was pretty subdued here yesterday. People were shocked weren't they?
FOSTER: They were. And there's this - you know people just don't know the process, what happens from here. The unraveling the laws, unraveling the systems, extricating from Brussels you just can't get your head around it.
ANDERSON: And it wasn't even clear until Mark Carney, the Bank of England Governor came out yesterday that there were any contingency plans. So if there hadn't been that would have been highly irresponsible of the officials here in the U.K.. And clearly there were contingency plans.
FOSTER: And the markets weren't as bad as they could have been.
ANDERSON: No. Well I mean the FTSE was down some 6 percent or 7 percent at one point, but came back to about 3 percent lower. But the German and the French markets viewers are ones to watch once again on Monday. Off some 6.5 percent or 7 percent or so.
FOSTER: Well we have to say one person is coming up smelling roses from this. I've been talking about this for a very long time. His name is Nigel Farage, he's the person that's been pushing most of all pretty much for a couple of decades for a Brexit.
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ANDERSON: That's right. He's the leader of the U.K. Independence Party. CNN spoke to him. And he told us why he still believes -- well, he basically cannot believe that his dream came true.
FOSTER: Look at that face. Thrilled.
ANDERSON: There you go.
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[01:43:00]
FOSTER: One key figure who has campaigned for more than two decades would you believe for Britain to leave the E.U. is someone called Nigel Farage.
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ANDERSON: That's right, he is the leader of the U.K. Independence Party and has been criticized for inciting fears over immigration.
FOSTER: That picture says it all. The vote to leave is a political success for Nigel Farage. Our senior international correspondent Nima Elbagir spoke with him.
NIGEL FARAGE, LEADER, U.K. INDEPENDENCE PARTY: I've been doing this for 25 years. I mean I was in danger I think in the 1990s of becoming a patron saint of lost causes. I mean I was written off as being a lunatic. And politically support for this was absolutely timing. So when we got to 10:00 last night and the polls closing, I almost dared not to hope that what I dreamt of and worked for for 25 years could happen. But it did.
NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Could you believe it when you heard it?
FARAGE: Not really, I'm not sure I can now to be honest with you. I mean it is, and I say that not just because of my journey, but it's such a big seismic political event. It doesn't just affecting the United Kingdom, it's affected the rest of the European Union too.
ELBAGIR: For those out there who have been concerned that the anti- immigration rhetoric has at times been cover for less savory sentiments. There have been times when like phrases like indigenous workers.
FARAGE: Well I've never used that phrase at all in the past.
ELBAGIR: You have not. But the leave campaign has become a very broad tent.
FARAGE: Well, both sides are a very broad tent. Look, I would say this to you. We set UKIP up, my party is not racist, a nonsectarian party we'd be very successful at doing that and being that, and all we've argued for is an Australian style point system. All we're arguing for is normality.
ELBAGIR: You've seen the market respond quite drastically already, you've heard concerns from around the world pouring in about what it means for all the ways Britain is essential and integral, not least the war on terror. The Foreign Secretary, Phillip Hammond saying he doesn't want to over exaggerate it but he believes Britain is palpably less safe. FARAGE: Just think about two things; firstly, those (inaudible) rifles
that used in Paris to murder about 130 people came from Berlin, through into the Netherlands, through into Belgium, through into France without any checks or any stops of any kind at all. And two, of the eight people that committed that atrocity in Paris had come back into Europe through the Greek islands posing as refugees. Those are real issues.
[01:45:20]
ELBAGIR: But we already don't have passport free travel in this country so they wouldn't have had the freedom of movement to come into the U.K.
FARAGE: Actually, we do. Actually we do. We're not in Schengen --
ELBAGIR: I always have to show my passport.
FARAGE: Well yes, we have to show a passport but it's still basically completely free movement. I think that even the Schengen zone is finished. I think national boundaries, national borders are going to start going up. I think the population across the rest of Europe is beginning to demand it.
And I want also make this point to Mr. Hammond. The way we deal with things like this, with information sharing and everything else, is you know we act as friends. We have the closest information sharing with the USA. But we don't need to be become the 51st state to do that. I mean I genuinely don't think Obama understands what the European Union is. He seems to think it's like a sort of rather big NAFTA. It's not. Come on, for goodness sakes, we are the closest allies in the world.
ELBAGIR: UKIP of course the U.K. Independence Party. You have independence. What happens now to you and to you --
FARAGE: Well, the first thing that happens is I lead the biggest British delegation in the European parliament. So we're going to watch these negotiations like a hawk to make sure that things are happening properly. And secondly, UKIP does need to stay strong to make sure the government carries out the wishes of the people.
(END VIDEO CLIP)
FOSTER: It's the big test now isn't it, for all of those lead campaigners. They've got to live up to all those promises during the campaign. It's going to be fascinating.
ANDERSON: Days and weeks ahead will be interesting. And don't forget that Britain is still in the E.U. as things stand at the moment. Britain will be in the E.U. today, it will be in the E.U. tomorrow, but it's what happens two years from now which is still an open question.
FOSTER: Yes, much, much more on the fallout of the referendum. We'll check some other stories though for you after this short break.
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JONATHAN MANN, HOST "POLITICAL MANN": Hello, I'm Jonathan Mann. This is your Road to Rio update.
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MANN: The lab handling all drug testing for the Rio Olympics has been suspended. The Brazilian doping control lab was slated to be open 24 hours a day during the games, but the World Anti-Doping Agency found the lab unfit citing what it called nonconformity with international standards.
U.S. basketball star, Lebron James will not be attending the 2016 games in Rio. The all-star forward played and medaled in the past three summer Olympics. But after his hometown team The Cleveland Cavaliers clinched the NBA championship this week, James said he could, "use the rest."
Transport authorities in Rio de Janeiro have started selling a special travel card to help visitors get to and from the venues for the Olympic and the Para-Olympic Games. The Rio Card provides visitors access to all of Rio's public transportation.
And Brazilian basketball star Janeth Arcain, a two-time Olympic medalist has been named the mayor of the Olympic Village in Rio. Arcain won a silver medal in Atlanta in 1996 and a bronze at the Sydney games in 2000. As mayor she'll welcome athletes and officials to the Olympic Village.
(END VIDEO CLIP)
MANN: That's your Road to Rio update. I'm Jonathan Mann.
[01:50:50]
NATALIE ALLEN, HOST: Hello. I'm Natalie Allen live from CNN Center in Atlanta. We will get back to our special coverage of the U.K's E.U. referendum there in London in just a moment but first other stories we're following. And we begin in the state of West Virginia.
At least 23 people are dead after massive floods.
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ALLEN: Houses and cars have been swept away, literally and some rivers overflowing their banks. Hundreds of rescuers are trying to save people who are still trapped in all of this. 44 counties in West Virginia have declared a state of emergency. The national weather service says there's a 1 in 1,000 chance of this much rainfall in that area in any given year.
UNIDENTIFIED MALE: Many people have lost everything. We are today, we begin to pivot to what we call health and welfare, beginning to assess and get equipment to people, cleaning supplies, things like that. We'll announce that later. But at this time, our thoughts and our prayers are with the victims of this tragedy. ALLEN: We're also watching a tragedy on the other side of the country.
This is Southern California. You can see a fast-moving wildfire there. It's near Bakersfield. It has killed at least two people and also burned nearly 100 houses. Authorities are now using dogs to search for more possible victims. The fire is covering about 30,000 acres of land, or 12,000 hectares. Right now, it is just 5 percent contained.
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ALLEN: Pope Francis is in Armenia and attended a wreath laying at the Armenian genocide memorial a bit earlier.
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ALLEN: Francis has said the mass killing of Armenians under Ottoman rule in World War I was a genocide and this trip is likely to draw the (inaudible) Turkey. The government of Turkey rejects calling the killings genocide and maintains there were losses on both sides.
Some 20 countries do recognize the event as a genocide, including France, Canada, Russia and Italy, the U.S., U.K. and Israel however do not. Turkey and Armenia also differ on the number of people killed back then. Armenia says some 1.5 million died. Turkey puts it at about 300,000.
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ALLEN: Brazil's only lab to test for illegal drugs says it hopes to get back its license in time for the summer Olympics, that's just six weeks from now.
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ALLEN: The Brazilian doping control lap was suspended on Friday without explanation. Lab officials hope to get the ban lifted after a meeting with anti-doping officials next month.
(END VIDEO CLIP)
ALLEN: The Brexit is dominating news out of Europe, of course, but in France, the Euro 2016 football championship is still alive and kicking. Two U.K. teams in fact, Wales and Northern Ireland, are set to face off in the coming hours. From CNN sports, here's Patrick Snell.
SNELL: So, the race for a place to make the last date is officially on. The tournament's surprise package and smallest competing nation, Iceland, they don't play until Monday in Nice when they face England.
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SNELL: But three matches are on the slate for Saturday including the eagerly anticipated clash between Wales lead by Real-Madrid superstar and Gareth Bale and a Northern Ireland team who have failed to win any of their last eight against the Welsh. Both countries have written their own special piece of history, though, in just getting this far. It's the first time either has reached the elimination stages of a major tournament in 58 long years. And nobody is in any hurry at all to leave.
CHRIS COLEMAN, WALES COAGH: It's all or nothing on this game. We can take a lot of confidence from the last performance which was outstanding. But that's yesterday, so to speak. You know it's all about tomorrow.
MICHAEL O'NEILL, N. IRELAND COACH: The words of wisdom for the team are simple, you know, again, find the game of your life tomorrow night. Stay here as long as you can. It's simple. You know we don't want this to end, we want to be looking forward to possibly going to the next round. And you know what we've got is we've got so much out of this tournament that will benefit us so much going forward. We have wrung every drop we can I think out of it and we want more.
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[01:55:09]
SNELL: The 2004 finalist Portugal have won all of their previous meetings with Croatia and with Cristiano Ronaldo rediscovering the gold trail in mid-week against Hungary they'll be hopeful of making that four.
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SNELL: CR7 has now become the first person ever to score in four European championships, and he's now just one goal shy of Michel Platini's record haul of nine for France at the Euros. That said, he and his teammates know they can take nothing for granted against opponents who recently ended defending champion's Spain's 14 match tournament unbeaten streak.
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SNELL: Also on Saturday, Switzerland-Poland with both countries having reached the knockout stages at this event for the very first time. The Swiss have won just once in ten attempts against the Pols.
(BEGIN VIDEO CLIP)
SNELL: But they know that if they can confine Robert Lewandowski to his current scoring drought they're in with a shout. Almost unbelievably the Beyer Munich forward has failed to score in his last six for his country.
ADAM NAWALKA, POLAND COACH: (As translated) We don't have a problem with the fact that Robert hasn't scored any goals. He's doing a great job for our side. We're a team which understands each other very well and puts the good of the team above all. Robert Lewandowski is finding himself well in his role. I don't like these comparisons with Cristiano Ronaldo. I don't want them, I'm very happy that Robert is on our side. (END VIDEO CLIP)
SNELL: Lewandowski scoring 13 in qualifying a tally that really is proving unlucky for some, it seems.
Patrick Snell, CNN.
ALLEN: And we're back in London live in just a moment for more on the European Union and the Brexit.
I'm Natalie Allen live in Atlanta. See you soon.
