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Parliament to Meet to Discuss Brexit Implications; Cameron Holds Emergency Meeting, Corbyn Face Coup; David Osborne Speaks to Reassure Markets; U.K. Wants Delay in Invoking Article 50, Brussels Wants It Invoked Now; UKIP's Nigel Farage Says Leave Camp's NHS Funding Promise a Mistake. Aired 2-3a ET
Aired June 27, 2016 - 02:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[02:00:26] JOHN VAUSE, CNN ANCHOR: Hello. Great to have you with us. We'd like to welcome our viewers in the United States and all around the world. I'm John Vause, in Los Angeles. It has just gone 11:00 on a Sunday night.
MAX FOSTER, CNN ANCHOR: And I'm Max Foster, outside the British parliament in London, where it just turned 7:00 on Monday morning.
Now, the British parliament meets to discuss the implications of voting to leave the British -- leave the European Union. And we are expecting all sorts of things to happen this morning. So we are expecting to hear this hour from George Osborne, a statement from him. He's going to reassure the markets, we understand. But also many questioning whether or not he can possibly stay within that job. And also David Cameron holding emergency meetings today. We're also wondering what on earth is going on in the Labour Party. Jeremy Corbyn, the current leader, is facing a coup, a very bloody coup, within his own party. But he's refusing to move.
I'm joined here by Robin Oakley.
We had to bring you back in, Robin, because we don't know what on earth is going on in the building behind us. After this temporary recess for the referendum, all the M.P.s are going to come back in here. But there's an absolute vacuum of leadership. What on earth are they looking to?
ROBIN OAKLEY, BRITISH JOURNALIST & CNN POLITICAL CONTRIBUTOR: Political chaos. It's a desperately dismayed country, waking up and wondering, what the hell have we done here. There is a battle for the Labour leadership with a leader who is discredited, trying to hang on. We've got a vacuum at the top of the Conservative Party. You know, we don't even know who is going to be leading the negotiations on Britain's future relationship with Europe until we get a new conservative leader. Of course, European leaders in the meantime want to get the whole thing sorted as quickly as possible because they don't want to see Brexit movements in other countries building up.
FOSTER: In terms of the Labour Party, just explain to us what's going on there. How can a leader lose -- how many was it, 12 members of his cabinet, possibly another 20 M.P.s going today from the cabinet, from those administrational positions? How can he stay in power?
OAKLEY: It's an unprecedented display of disbelief in their own leader. And 12 senior shadow ministers going, trying to put the pressure on Jeremy Corbyn. Basically, they're saying you're not up to the job. And particularly they are angry that he didn't make the case for Remain as was the Labour Party's official position on the referendum. They feel that he has a long history as a Euro-skeptic himself. He didn't put his heart and soul into it. And they're also deeply worried that there was huge Leave support in Labour's own heartlands, which gives Labour a very big problem for the future. UKIP, the United Kingdom Independence Party, pinching an awful lot of their traditional powers.
FOSTER: How is he able to stay in power? What's the process here?
OAKLEY: What we're going to see today is a motion of no confidence being pressed by his own party, which will probably be settled in a secret ballot tomorrow. But Jeremy Corbyn --
(CROSSTALK)
FOSTER: -- triggers an election in the Labour Party?
OAKLEY: He's got to get somebody to stand against him, has got to get 20 percent of the 232 Labour M.P.s, I think it is, to back them. Jeremy Corbyn says he will stand again himself.
FOSTER: He may well win again because he's got this massive grassroots support. Some people suggesting though, because it's a young vote that he had, and they're pro-European, they're going to be pretty fed up with him.
OAKLEY: It's an ideologically based support that he's got among the activists, and many of them trade unionists. The problem then is, if he is reelected after a challenge, what do all those moderate M.P.s, or of his leadership, what do they do? The possibility is they break off and form a new party, a new parliamentary grouping, rather like we saw after the 1975 referendum in Britain. There was a break away from the Labour Party. The Social Democratic party emerged, and the conservatives held power for the next 18 years.
FOSTER: OK. We are standing by for a statement from George Osborne, finance minister, Chancellor of the Exchequer. He's going to calm the markets. Very important for him to do that today. The markets are opening in an hour or so from now. A couple of the markets in Asia have just closed. We can give you a sense of what's happening there. European markets an hour away from opening.
Joining us now to understand the numbers, Nina dos Santos here in London on the trading floor. Also Andrews Stevens in Hong Kong.
To you first, Steven on reaction.
[02:05:03] ANDREW STEVENS, CNN ASIA-PACIFIC EDITOR: That's right, Max. The reaction was much calmer here as the markets opened in Asia after that extraordinary trading day on Friday across the trading world. We saw markets seesawing a little bit today, but the Nikkei, which bore the brunt of the selling on Friday, as you see there, closing up around 2.4 percent. And a lot of this can be traced back to the fact that the Japanese government has been meeting with the Bank of Japan, the central bank, to talk about what steps they need to take to protect the ever-strengthening yen. Now, the yen is seen as something of a safe haven. In times of trouble, investors tend to turn to buying yen just to park their money if you like. That has the impact of strengthening the yen, which hurts companies, particularly if they're exporters. So that's what's been hitting the markets in Japan. So what we're seeing really is it's not physical intervention from the Japanese authorities but certainly they're making their intentions clear that they're prepared to, if this continues to be a safe haven currency.
And to be honest, Max, all indications are that it will be because we are, as you and Robin speak, you made very clear we're no closer to any questions being answered. In fact, many, many more questions keep popping up. So while this goes on, there is going to be this massive uncertainty across all asset classes pretty much, across all markets. So we are going to see a lot of volatility in these markets as everybody has been warning.
Interestingly, underlying the real fear here is, is the European project going to disintegrate. George Soros, very well investor, the man who broke the Bank of England, saying it was virtually inevitable now that the E.U. would fall apart. And that really is a doomsday or nightmare scenario for markets because it's turning their back on capitalism in many ways. It's getting rid of the European project and creating that sort of uncertainty that markets just hate -- Max?
VAUSE: OK. Andrew Stevens there with an update on the trading day across Asia.
Nina dos Santos is standing by at the London trading floor.
Nina, what are they expecting there in the coming hours?
NINA DOS SANTOS, CNN CORRESPONDENT: Yeah. Traders are at their desks here in London. About 50 minutes to go before the opening bell strikes. Well, they're basically expecting another 3 percent drop for the FTSE 100. That's according to the futures markets. But the real losses have been incurred overnight in the British pound. That currency sinking back towards 133. And perhaps even 132 at one point, it looked like it was going to hit. Remember, this is a currency that just one and a half trading sessions away back on Thursday evening hit 150. And there's a lot of concern across the city of London that the British pound will continue to suffer as we see this political turbulence on both sides of the House of Commons. There's real concern here that politically this is a country that is waking up to a rudderless future as it heads into its difficult negotiations to try to extricate itself from its relationship with the E.U.
Somebody is going to be taking to the stage in the next hour or so is George Osborne, the U.K. chancellor. Remember that Mark Carney, the Bank of England governor, stood up on the stage just before markets opened, when I was standing here on this trading floor, just on Friday to reassure the markets. Now it's the turn of the finance minister of the country to talk about stimulus. We've had monetary stimulus there from the Bank of England, him saying that he's ready to pump more money into the system to cushion the banks as their shares were falling around 25 percent. So now we're going to be hearing from perhaps even the fiscal side of it. Monetary and fiscal stimulus always going hopefully hand in hand to try and stimulate markets or at least calm the declines we're seeing.
I want to talk about gold, though, because that has been the recipient of the money that's been coming out of things like the British pound, the money that's been coming out of equity markets. It's sold about 8 percent on Friday's session, continuing to rise from here above 1,300. And some people say it could hit 1,400 if people keep plowing back into that ultimate safe haven asset, just like the Japanese yen as Andrew was pointing out. People go to the yen. They also go to gold in times of turbulence like these.
VAUSE: OK. Nina dos Santos on the trading floor.
Stay with us.
Let's go back to Andrew Stevens in Hong Kong as we wait for the Chancellor of the Exchequer, George Osborne, to make that statement.
Because, Ander, right now, what these politicians and what these policy makers say matters, and it matters a lot to the markets.
[02:09:41] STEVENS: Absolutely. They are the -- they're the last resort, if you like. They can make things happen at government levels. What we see in times of crisis, time and time again, final crisis, is a coming together, a concerted action from central banks around the world, John. They're all singing from the same hymn book. They're all talking about offering the same sort of support for the markets. And that has the effect of calming nerves. Now, we haven seen it to the degree that we saw it back in the financial crisis of 2008. We haven't seen it because this has -- even though there has been the ripple effect around the world on the markets, it wasn't panic on Friday. We saw a pretty orderly sell-off of both the pound and equities around the world, but there wasn't that feeling of, oh, my god, it is the end of the world, which we had very much so in 2008. So that's what the central bankers have in the pocket at the moment, concerted action. They're talking a good game at the moment, but they're not acting. They don't see the necessity to actually act. And that's key, because once they start throwing things at the markets, that's a sign that they're getting very, very worried, too. They're hoping to talk their way through this, to calm some of the markets down.
And like I said before, John, if you look at what's happening in Asia today, certainly much calmer today after that big sell-off on Friday. And to be fair, that sell-off came in the wake of several days of market increases because everybody was betting on the Remain Camp winning. When that didn't happen, all those gains of the previous day's trading blown -- just over the course of the day, blown in the first few minutes basically. So we're sort of back to where we were. It's certainly not a free-for-all or a freefall around the world at this stage, but the central bank authorities are standing by.
VAUSE: OK. As we are, too.
Andrew Stevens there in Hong Kong. Nina dos Santos in London. Appreciate you both being with us.
Now, Scotland's first minister says the country will do whatever it takes to stay in the E.U. Raise the prospect of legally blocking the Brexit.
CNN's David McKenzie is in Edinburgh, Scotland, with more on Nicola Sturgeon's strategy.
This is what is an interesting employ here coming from the Scottish leader. Essentially, using a very obscure rule about the Scottish parliament, which may or may not, depending on who you ask, block the Brexit.
DAVID MCKENZIE, CNN CORRESPONDENT: That's right, John. You know, Nicola Sturgeon seems to be one of the few senior politicians in the U.K. who had a plan ready should there be a Leave vote. And her latest strategy, as you suggest, is an obscure law, though well known in legislative process, that the Scottish government might have to block the legislation that would have to be put through parliament to leave the European Union.
VAUSE: I'm afraid we -- David, I think we have to leave it there because I think we are now expecting George Osborne to make that statement.
So we'll now listen to what the Chancellor of the Exchequer has to say.
GEORGE OSBORNE, CHANCELLOR OF THE EXCHEQUER: -- from a position of strength. That is because in the last six years, the government and the British people have worked hard to rebuild the British economy. We've worked systematically through a plan that today means Britain has the strongest major advanced economy in the world. Growth has been robust. The employment rate is at a record high. The capital requirements for banks are 10 times what they were. And the budget deficit has been brought down from 11 percent of our national income, and was forecast to be below 3 percent this year.
I said we had to fix the roof so that we were prepared for whatever the future held. And thank goodness we did. As a result, our economy is about as strong as it could be to confront the challenge our country now faces. And that challenge is clear. On Thursday, the people of the United Kingdom voted to leave the European Union. That is not the outcome that I wanted or that I threw everything into campaigning for. The parliament agreed that there are issues of such constitutional significance that they cannot solely be left to politicians and must be determined by the people in a referendum.
And now that the people have spoken, we, in this democracy, must all accept that result and deliver on their instructions. I don't resiel (ph) from any of the concerns I expressed during the campaign, but I fully accept the result of the referendum and will do everything I can to make it work for Britain.
It is inevitable after Thursday's vote that Britain's economy is going to have to adjust to the new situation we find ourselves in. In the analysis that the treasury and other independent organizations produced, three particular challenges were identified, and I want to say how we meet all three.
[02:14:50] First, there is the volatility we have seen and are likely to continue to see in financial markets. Those markets may not have been expecting the referendum result, but the treasury, the Bank of England, and the financial Conduct Authority have spent the last few months putting in place robust contingency plans for the immediate financial aftermath in the event of this result. We and the PRA have worked systematically with each major financial institution in recent weeks to make sure they were ready to deal with the consequences of a vote to leave. Swap lines were arranged in advance so the Bank of England is now able to lend in foreign currency if needed. As part of those plans, the bank and we agreed that there would be an immediate statement on Friday morning from the governor, Mark Carney. And as Mark made clear, the Bank of England stands ready to provide 250 billion pounds of funds through its normal facilities to continue to support banks and the smooth functioning of markets. And we discussed our coordinated response with other major economies in calls on Friday with the finance ministers and central bank governors of the G7. The governor and I have been in regular touch with each other over the weekend, and I can say this morning that we have further well thought through contingency plans if they are need. In the last 72 hours, I've been in contact with fellow European finance ministers, central bank governors, the managing director of the IMF, the U.S. treasury secretary, and the speaker of the U.S. Congress, as well as the CEOs of some of our major financial institutions so that collectively we keep a close eye on developments.
It will not be plain sailing in the days ahead, but let me be clear, you should not underestimate our resolve. We were prepared for the unexpected, and we are equipped for whatever happens. And we are determined that, unlike eight years ago, Britain's financial system will help our country deal with any shocks and dampen them, not contribute to those shocks or make them worse.
Now, the second challenge our analysis identified in advance was the uncertainty that a vote to leave would bring in the coming months and beyond as Britain worked with its European allies to create a new relationship. The prime minister has given us time as a country to decide what that relationship should be by delaying the decision to trigger the Article 50 procedure until there is a new prime minister in place for the autumn. Only the U.K. can trigger Article 50. And in my judgment, we should only do that when there is a clear view about what new arrangements we are seeking with our European neighbors. In the meantime, and during the negotiations that will follow, there will be no change to people's rights to travel and work and to the way our goods and services are traded or to the way our economy and financial system is regulated. However, it is already evident that as a result of Thursday's decision, some firms are continuing to pause their decisions to invest or to hire people. As I said before the referendum, this will have an impact on the economy and the public finances, and there will need to be action to address that. Given the delay in triggering Article 50 and the prime minister's decision to hand over to a successor, it is sensible that decisions on what that action should consist of wait for the OBR to assess the economy in the autumn and for the new prime minister to be in place. But no one should doubt our resolve to maintain the fiscal stability we have delivered for this country.
And to companies large and small, I would say this. The British economy is fundamentally strong. We are highly competitive, and we are open for business.
The third and final challenge I spoke of was that of ensuring that Britain was able to agree a long-term economic relationship with the rest of Europe that provided for the best possible terms of trade in goods and services. Together my colleagues in the government, in the Conservative Party, and in parliament will have to determine what those terms should be and will have to negotiate with our European friends and allies to agree them. I intend to play an active part in that debate for I want this great trading nation of ours to put in place the strongest possible economic links with our European neighbors and with our close friends in North America and the Commonwealth and our important partners like China and India. I do not want Britain to turn its back on Europe or on the rest of the world. We must bring unity of spirit and purpose and condemn hatred and division wherever we see it. Britain is an open and tolerant country, and I will fight with everything I have to keep it so.
[02:20:10] Today, I am completely focused on the task at hand as Chancellor of the Exchequer to bring stability and reassurance. There have been questions about the future of the Conservative Party, and I will address my role within that in the coming days.
In conclusion, the British people have given us their instructions. There is much to do to make it work. We start from a position of hard-won strength. And whatever the undoubted challenges, my colleagues and I are determined to do the best for Britain.
Thank you.
I think it's time for a few questions. Let's take some questions.
Kamal?
KAMAL AHMED, REPORTER, BBC: Kamal Ahmed from the BBC. Chancellor, you said before the referendum that if Britain voted to leave the European Union, you would have to put in place an emergency budget within two months. Are you still planning that? And also can you tell us a little bit about your position? Did you consider resigning, and if not, why not?
OSBORNE: Well, first of all, I've got a very important job to do, which is, as chancellor, to speak to international investors, to speak to my counterparts, to do what I can to stabilize the British economy. That's what people would expect of their chancellor, and that is what I am 100 percent focused on and will continue to be focused on in the weeks ahead. There will be an adjustment in our economy because of the decision
that the British people have taken. I respect that decision, and we're going to get on and deliver on that decision. But that impact on our economy will have an impact on our public finances. Given the delay in triggering Article 50, given the decision by the prime minister to hand over to a successor, I think it's perfectly sensible to wait for a new prime minister before action is.
Is there another question?
Joe?
JOE HILLS, REPORTER, ITV NEWS: Joe Hills, ITV News. Chancellor, can I pick up on that? You seem to be suggesting there will not be an emergency budget. Can we be clear on that?
OSBORNE: Well, I'm saying that there will have to be action to deal with the impact on the public finances. But of course, it's perfectly sensible to wait until we have a new prime minister to determine whether --
(CROSSTALK)
HILLS: You said that a vote to leave would be irreversible, would cause financial instability and would demand an immediate response from government. You're now proposing to delay a response.
OSBORNE: Well, what you have seen is an immediate response from government in terms of the financial contingency plans coming into effect, liquidity being available, work with our international partners in the G7 and elsewhere to provide reassurance about the fundamental strengths, not just of the British economy and financial system, but the global financial system. Of course, the economy is going to adjust, and there will be an impact on the public finances. That's what I said before the referendum. I don't resolve from anything I said before the referendum. And I said that there would have to be action in the autumn to address that. I think it's perfectly sensible to wait until we have a new prime minister before we address that.
Let's take another question.
Ed?
ED CONWAY, REPORTER, SKY NEWS: Thank you. Ed Conway from Sky News. Chancellor, you said before the referendum that there was going to a recession if we voted to leave the E.U. Do you stand by that? Do you think we are now at the start of that recession? And secondly, would you serve in a government committed to leaving the E.U.?
OSBORNE: Well, look, let me take the first question. I made a series of predictions or, rather, the treasury made a series of predictions, which I agreed with, about the impact on the economy if we voted to leave the E.U. And of course, there were a range of impacts depending on the kind of new relationship that we arrive at with the E.U. But all of them required an adjustment in the economy. After I made that analysis, actually, a whole range of independent organizations came up with very similar conclusions. And as I say, I don't resolve from that. But of course, I'm going to work very hard to make sure we mitigate the impact, remind people of the fundamental strengths of the British economy.
As far as my position and my role, I've got an incredibly important responsibility to people as the Chancellor of the Exchequer to provide stability in these challenging times. And I take a very simple view of life, which is, it's my country, right or wrong, and I intend to fulfill my responsibilities to the country.
Let's take Chris.
CHRIS GILES, REPORTER, "THE FINANCIAL TIMES": Chris Giles from "The Financial Times." Can you give a message to British households or companies who are thinking of delaying spending? What would you say to them? Can they go on as if nothing has happened?
[02:25:09] OSBORNE: Well, look, what the British people need to know is that the fundamentals of the British economy are strong. We have spent the last six years so that Britain is prepared for whatever is thrown at it. There will be a period of economic adjustment because of the decision we've taken, but we will get on and implement that decision democratically arrived at in our country. But we do so from a position where we have one of the strongest economies in the world, where we have repaired our financial system, where we are repairing our public finances, and where we have record employment. And so people need to know the fundamentals are strong. We have dealt with the immediate challenge of an unexpected vote, as far as financial markets are concerned, the calls we had in place, detailed contingency plans. There will be an adjustment in the months ahead, but I think we are well placed to meet that adjustment. And our message to businesses large and small is very simple, Britain is open for business.
Thank you very much.
VAUSE: We've been listening there to George Osborne, the Chancellor of the Exchequer, in London, delivering a statement, his first statement since the referendum for the U.K. to leave the E.U.
Max Foster and Robert Oakley have been listening along as well. So let's go back to Max Foster outside parliament.
FOSTER: You know, that was a sign of defiance, wasn't it, in many ways. George Osborne, many expected him to be stepping down. He's going to stay in position. And he's been very clear. He's talking about that being the best thing for the British economy.
And also, Robin, what was interesting was before all this, he said if there was a Brexit, there would be an emergency budget straightaway. But now there won't be one.
OAKLEY: Yes. He's now saying it's sensible to wait a couple of months until there is a new prime minister before you have any kind of new budget, if that proves to be necessary. First of all, he's trying to reassure the markets. That was the first
message, by saying that Britain now has one of the strongest economies in the world, that the government of which he has been part had promised to fix the roof. He says they have fixed the roof. Now the rain has come down. They're in a position to handle it. They had robust contingency plans. All of that very much addressed to the markets.
In terms of what's going on inside the Conservative Party and his own future, the interesting thing was that he said he wanted to play a significant part in the debate about what kind of deal Britain now achieves with the European Union.
(CROSSTALK)
FOSTER: Yeah. So this is what Boris Johnson is suggesting, that before they invoke this two-year period, this Article 50, there will be some sort of discussion about what would come out of the other end. He wants to be a part of that. Europeans, though, don't want any of that, do they? They want this process to start straightaway.
OAKLEY: Yes, they want it to start straightaway, but as George Osborne was careful to point out, only Britain can initiate Article 50, the two-year process of detaching from the European Union. And he makes it clear that, you know, that isn't going to happen until there's a new prime minister in place. He didn't say anything about who he might be supporting as a potential new prime minister, of course. And he's still holding open the possibility of some kind of emergency budget at the end of the process of producing a new conservative leader who will be prime minister.
FOSTER: In terms of what does happen from here, we're going to talk a lot about that throughout the morning. There's a huge amount of confusion about what happens in the government, what happens in the Labour Party as well. There's a huge amount to analyze here. And we're going to be looking at the shock waves throughout Europe as well. So we're going to get reaction from different parts of Europe, Brussels and Berlin, for example, but also Edinburgh crucially. All that ahead.
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[02:32:14] FOSTER: The fallout from Thursday's Brexit vote continues. We've just heard from U.K. finance minister, George Osborne, in a TV address. He tried to calm doubts about the British economy.
The U.K. parliament is also set to meet in the coming hours for the first time since Thursday's vote to leave the E.U. It's expected the Brexit results will top the agenda, along with David Cameron's decision to resign as prime minister.
Meanwhile, opposition leader, the Labour leader, Jeremy Corbyn, says he won't step down. Corbyn backed the Remain Camp. But some say he showed weak support for it. He's under pressure to leave after multiple resignations from his shadow cabinet.
Now, the E.U. says it wants Britain out in a timely fashion, but it could take two years or more to actually reach a deal.
Our Atika Shubert is standing by in Berlin.
But first, we turn to Nic Robertson because he's in Brussels.
Nic, everyone's absolutely baffled about what is going to happen from here. We've heard Boris Johnson and George Osborne saying this Article 50 won't be invoked until they're ready. But Brussels wants to invoke now.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: They do, although I think there does seem to be a level of belief and understanding that perhaps some preparatory work in advance of Britain actually triggering that Article 50 to begin the formal negotiations for exit might be in everyone's interest. Also, too, a little pause. I mean, there can be no doubt while European politicians may have become frustrated over the past 40 years, Britain's prevarications on the amount of involvement it would have within the European Union, not signing up for the Schengen Area, not signing up the Euro, all these sorts of things which have really rankled here in Brussels, there's a recognition that the political -- the political situation in Britain at the moment is really not ready to make the decisions that Brussels would like to have them make quickly. I think perhaps, you know, Angela Merkel has been the one to see that pausing for a short time will perhaps allow Britain to come to a better or more sensible judgment over time about when to trigger and how to trigger and how to go through all of this. I think perhaps that is going to growing recognition here in Brussels. And certainly when U.S. Secretary of State John Kerry arrives here later today to meet with Frederica Mogherini, the E.U. foreign policy chief, his main message here is about providing stability for global financial markets, not least of all in the United States, of course. But that will probably be with a dose of political reality about it. Look, we're all friends. Let's work together on this. Let's not throw our toys out of the pram, so to speak. George Osborne was very clear, saying it's not about to happen overnight. Europe's not going to get what it wants. Britain is a big power, and it's ready to walk into the rooms here and say that. However, it is trying to negotiate its way out on favorable terms. It's hard to square that, but that's where we stand right now -- Max?
[02:35:22] FOSTER: Nic, in Brussels, thank you.
Atika, you're over there in Berlin. Chancellor Merkel has got to make a decision here, hasn't she? She doesn't have to go into any sort of negotiation with Britain ahead of invoking this Article 50. But she would have to do that out of goodwill. I mean the Brits are making this sound as if there's a duty to do that, but this is unprecedented. The only thing that we know is that Britain has to invoke that Article 50. That's the only fact here.
ATIKA SHUBERT, CNN CORRESPONDENT: Absolutely. And Merkel is the voice of calm in all this. Her own foreign minister over the weekend was saying we have to see the U.K. leaves as quickly and painlessly as possible. Her finance minister has earlier said out means out, no special concessions or negotiations with Britain. But the chancellor herself over the weekend said, "There's no need to get nasty," and that's a direct quote, about negotiations.
What will be interesting to see today is she has a flurry of meetings. She'll be meeting with European Council president, Donald Tusk, at 3:00. After that, she'll be meeting with French President Francois Hollande, and the Italian prime minister. It will be interesting to see in particular what she says after her meeting with Hollande because Hollande has also been very clear, the U.K. is out, let's move on, this must happen as quickly as possible. Merkel is playing the good cop, if you will, where she says let's take some time here.
And perhaps the biggest indication that Germany could allow, for example, for a little bit of an open door for the U.K. is that her chief of staff told the local RND paper here that, quote, "Politicians in London should have the opportunity once again to reconsider the consequences of a withdrawal." So just a little space there for perhaps the U.K. to give it another think, maybe re-Brexit is a possibility for doing something over again.
FOSTER: There's some suggestion here, some academics suggesting that perhaps the Article 50 will never actually be invoked because it's all on the U.K. to make that happen. And until they've got some -- that's their bargaining chip effectively with Europe. How do you think Chancellor Merkel would respond to that?
SHUBERT: I think that, in a legal sense, this is absolutely true. The only person, the only government that can invoke Article 50 in this case is the U.K. The E.U. can put all the pressure it wants at this point, but it's the sovereign right of the U.K. to decide when it wants to -- when and if it wants to invoke Article 50. And I think that Chancellor Merkel is being pragmatic here. She knows this. So she's saying, look, we can shout and scream all we want, but the fact is we can't pressure them to do anything at the moment. So let's take a breather, step back, and think about what our options are.
FOSTER: OK. Atika, thank you very much, indeed.
Also Nic in Brussels.
Lots to digest today. Lots of meetings. We'll bring it all back together for you.
A Brexit backer is backing away from a major claim, meanwhile, about the Leave Campaign. An interesting debate around this particular sign.
(COMMERCIAL BREAK)
[02:41:55] FOSTER: One promise made by the Vote Leave Campaign may be hard to keep. This message was emblazoned on buses, you might remember, and is still on the campaign's official Twitter account. Quote, "We send the E.U. 350 million pounds a week. Let's fund our NHS instead." That was the Leave Campaign's pledge, to invest up to 350 million pounds a week on the National Health Service from money that was being contributed to the E.U.
U.K's Independence Party leader, Nigel Farage, though, wasn't part of the official Vote Leave Campaign but was a key advocate for it. In an interview with ITV's "Good Morning, Britain," Farage now calls the claim a mistake.
(BEGIN VIDEO CLIP)
UNIDENTIFIED HOST, GOOD MORNING, BRITAIN: The 350 million pounds a week we send to the E.U., which we will no longer send to the E.U., can you guarantee that's going to go to the NHS.
NIGEL FARAGE, UKIP LEADER: No, I can't. And I would have never have made that claim.
UNIDENTIFIED HOST, GOOD MORNING, BRITAIN: 17 million people have voted to leave.
FARAGE: Yes.
UNIDENTIFIED HOST, GOOD MORNING, BRITAIN: Based -- I don't know how many people voted on the basis of that ad, but that was a huge part of the propaganda. You're now saying that's a mistake?
FARAGE: We have a 10 billion pound a year, a 34 million pound a day featherbed that is going to be free money we can spend on the NHS, on schools, or whatever it is.
UNIDENTIFIED HOST, GOOD MORNING, BRITAIN: But you're not guaranteeing that that money, as promised, will go to the NHS?
(CROSSTALK)
FARAGE: You must understand, I was ostracized by the official Leave Campaign. I did, as I've always, I did my own thing.
UNIDENTIFIED HOST, GOOD MORNING, BRITAIN: Do you think there will other things people will wake up this morning and find out aren't going to happen as a result of voting this way?
FARAGE: Well, I'll tell you what they will find out, that we're back to being a normal country in charge of our own laws and able to start making our own relationships with the rest of the world.
(END VIDEO CLIP)
FOSTER: An awful lot to talk about. Let's go deeper into it with CNN political contributor, Robin Oakley; also Conservative Member of Parliament, John Redwood.
And you promoted that 350 figure, right?
JOHN REDWOOD, BRITISH M.P, CONSERVATIVE PARTY: ROBIN OAKLEY, CNN POLITICAL CONTRIBUTOR: No. I made it very clear that the grace figure was 350 million. It's actually 360 million now. But the amount you can spend extra is 10 billion a year, which was a figure we always used. And we did a costed program based on the 10 billion, which included a lot of money on the health services. FOSTER: Britain will not get 360 million pounds a week. There won't
be 360 pounds a week better off as a result of leaving the E.U. So that doesn't count, the money you get back from the E.U.
REDWOOD: We will get some of the money back to spend as we wish. And other money, we will choose to spend on exactly the things that the E.U. --
(CROSSTALK)
FOSTER: It was a very clear promise, and it's completely --
REDWOOD: Yes, I made a very clear promise along with my colleagues that we would spend 10 billion extra --
FOSTER: 360 million pounds is a huge promise to make.
REDWOOD: We did all this for the referendum. It's very clear --
(CROSSTALK)
FOSTER: You can't dismiss this. It's still on the website.
REDWOOD: 360 million is the gross figure, and it's entirely accurate. The net figure of extra spending that we can have on things like health and the cancellation of VAT on fuel come from the 10 billion --
(CROSSTALK)
FOSTER: I'm more concerned about the figure, and people --
Robin, do you think voters were coned?
ROBIN OAKLEY, CNN POLITICAL CONTRIBUTOR: I think voters were misled by both campaigns. There were so many phony figures being floated that I don't think a lot of people took too much notice of the figures at the end of the day. They voted on a general feeling of in or out. Most people don't follow the detail in the way that you or I or John Redwood will be doing. All the things that John and others have said in their statements campaigning, nobody will remember those in three months' time at all.
[02:45:17] FOSTER: Well, if they're voting for the NHS, and that benefiting, then they might be a bit frustrated now that --
REDWOOD: Well, there will be substantial money available to increase spending on the NHS, and a lot of us want to do that. And I'm very pleased the Chancellor of the Exchequer this morning has said he wishes to implement the will of the British people, and has announced, in terms, there needs to be no penal of punishment budget, because you may remember that's an important part --
(CROSSTALK)
REDWOOD: And he's wisely said, no, there will not be one. We made it very clear in the campaign we wouldn't vote one for and there was no need for one, and he will, instead, or his successor, will review the economy in the normal way at the end of the year when they get the latest updated --
(CROSSTALK)
(CROSSTALK)
FOSTER: Robin?
OAKLEY: Will a Brexit-style conservative-led government -- where will we go now in terms of the single market? Do you still want us to be in the single market, and do you agree with Boris Johnson we can both be in the single market and avoid free movement of people?
REDWOOD: Yes, of course. That's what we're aiming to get. That's what the British people voted for. We're going to have access to single market. They're not going to stop us trading from them. They want to still sell us cars and wine and other things.
(CROSSTALK)
FOSTER: Freedom of movement comes with that.
REDWOOD: Freedom of movement. We wish to have our own migration controls. We're not going to stop all migration. There will still be quite a lot of migration, but it's going to be based on qualifications and contributions and potential investment and all those other good things.
OAKLEY: But the price for Norway's access to the single market was an acceptance of free movement of people. Why would it be different for Britain?
REDWOOD: We're a much bigger economy, and we just voted for a different policy. Norway accepted that because they actually had a government that wanted to belong to the whole E.U., and they had a people who didn't, and the government pushed it further than I think they should have done. But that's a matter for the Norwegians.
(CROSSTALK)
REDWOOD: We're going to have a government that believes in what the people believe in, which is trading with Europe but not being governed by them.
FOSTER: Because it's a more powerful country, it's going to negotiate a better deal than Norway could.
REDWOOD: Yeah. And we have a massive deficit with them, and we've already seen, quite right, with Mrs. Merkel being very careful, Germany industry saying they don't want any changes. You see, the people that made the case that our trade was going to be wrecked never got any senior representative of the major trading countries on the continent to say what tariffs they wanted to impose and what new barriers they wanted to impose. I don't believe they want to impose any barriers. FOSTER: The big debate today is Article 50, which we all now know
about. We didn't know much about it before. When will it be invoked? And should it be invoked? Will it ever be invoked? We're now getting the impression that actually it might not be invoked at all, because that's the one bargaining chips that the likes of Boris Johnson have got with Europe.
REDWOOD: Yes, a lot of us are not keen to invoke Article 50. We'd rather sit down and negotiate with our partners --
(CROSSTALK)
REDWOOD: -- under a sensible regime rather than under the treaty we are rejecting. But that is a matter of discussion. There will be all sorts of lawyers telling us we have to do it under Article 50. But it's international law or international politics --
(CROSSTALK)
FOSTER: For you, in this debate, has Article 50 become academic and irrelevant?
REDWOOD: Well, we said very clearly, although I don't think he got reported very much, in the campaign that we were not minded to use Article 50. We would rather legislate in the House of Commons to take the necessary powers back, but to reconfirm our commitment to all the trading arrangements and all the products arrangements and all those kind of things in good British law, and sit down with our partners and say, do you want any changes to the trading arrangements, because we don't actually, and we're happy to live with them even though they're so much better for you than for us.
OAKLEY: How long would the process been be, though, because George Osborne was saying today already big companies are pausing investment and pausing employment decisions. And the key problem is uncertainty, isn't it? How long does the negotiation and the uncertainty go on? You know, how long before we see an actual economic benefit from Brexit?
REDWOOD: Well, it's going to take a bit of time because we need to get a new prime minister and a new government first because, as we've learned, the present prime minister and chancellor don't feel empowered to get on with it. And they understand there's going to be a change of personnel, so there's going to be a little bit of delay. The Conservative Party wants to be as quick as possible to get in a new leader, and I think you'll find we'll be down to the last two before parliament breaks for the summer recess. We will get a move on. In the meantime, there's a lot of other preparatory work and I think there could be preparatory talks, but that depends on both sides being willing to do that. But the sooner they get down and start talking about the details, the sooner we'll know whether France and Germany to actually want to put new tariffs on, for example.
[02:49:46] FOSTER: OK. Thank you, both of you.
There's so much to debate. Article 50 now possibly not even on the table, an extraordinary development in this ongoing story.
We'll bring you much more on Britain's decision to leave the E.U. after this.
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(WEATHER REPORT)
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FOSTER: New developments this hour on the Brexit vote. There's new development every hour pretty much. We've just heard from the U.K. finance minister, George Osborne, in a televised address. He tried to calm many doubts about the British economy. The question is, did he.
Richard?
RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Good morning to you. It was a much more somber, much more serious, much more worried looking Chancellor of the Exchequer than I've seen before. And what I found particularly interesting was this is a man we have not seen until now. He has -- we've had a couple of tweets on Friday, but we've had no hide, nor hair of the finance minister until this morning.
I'm just going to look at my notes. Do forgive me as I do so.
He talked about the U.K. economy being in a position of strength, one of the strongest economies in the world. Growth was robust. And just about as strong as it could be to confront the challenges that we now face. But, and this is the important bit, he said, "I don't resile from any concerns during the campaign." Well, I had to go and look up what the world "Resile" meant. And what it means is I don't pull back from or withdraw from or throw back or boomerang. In other words, he stands by everything he said during the campaign. What does that mean in reality? It means a potential recession for the U.K. economy. It means very hard times ahead. It means lower GDP growth in his view.
And, Max, one of the most -- but of course, he had to eat a good dose of humble pie because he had promised this emergency budget. That's now not going to happen.
[02:55:33] FOSTER: Yeah, and that was -- you know, all these promises, which, you know, are being broken effectively aren't they during this campaign. But he was front and center with David Cameron on the Remain Campaign. David Cameron's gone. Why has George Osborne not gone? You'd expect him to, wouldn't you?
QUEST: No, I wouldn't have expected him to go. I mean, he will go in time because there needs to be, you know, in the view of the Leave Campaign, there needs to be a Brexiteer in the prime ministership, and they are unlikely to keep George Osborne at the treasury. But I think to lose the prime minister and to lose the chancellor would be very devastating at the moment.
(CROSSTALK) FOSTER: -- he stays in.
QUEST: I would think for the time being. But he's gone. I mean, he's dead man walking in treasury.
FOSTER: OK. Thank you very much indeed, Richard.
Much more analysis of that and more developments as well we're expecting here in the Labour Party in particular.
Thank you for joining us this hour. Max Foster, outside the houses of parliament in London.
Much more on the U.K.'s decision to leave the E.U. right after this.
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