TBR News June 25, 2016

Jun 24 2016

The Voice of the White House

Washington, D.C. June 25, 2016: “The concept of the EU was an American one, and it was set up to make mutual business, and world-wide spying easier. If the US had not attacked Putin and sanctioned him, it is doubtful that the Brexit would ever have happened. It is a pity that the United States cannot find a leader who is as supportive of is country and as competent is Vladimir Putin is for his own people. American government is a government by committee, lazy and incompetent. After all, a camel is a horse designed by a Congressional committee. Various business groups call the shots in DC and the losers are the tax-paying and long-suffering shrinking middle class. Washington would do well to contemplate Brexit and its coming consequences instead of screaming how evil Mr. Trump is and how honest and saintly Hillary is.”

The Müller Washington Journals   1948-1951

At the beginning of December, 1948, a German national arrived in Washington, D.C. to take up an important position with the newly-formed CIA. He was a specialist on almost every aspect of Soviet intelligence and had actively fought them, both in his native Bavaria where he was head of the political police in Munich and later in Berlin as head of Amt IV of the State Security Office, also known as the Gestapo.

His name was Heinrich Müller.

Even as a young man, Heini Müller had kept daily journals of his activities, journals that covered his military service as a pilot in the Imperial German air arm and an apprentice policeman in Munich. He continued these journals throughout the war and while employed by the top CIA leadership in Washington, continued his daily notations.

This work is a translation of his complete journals from December of 1948 through September of 1951.

When Heinrich Müller was hired by the CIA¹s station chief in Bern, Switzerland, James Kronthal in 1948, he had misgivings about working for his former enemies but pragmatism and the lure of large amounts of money won him over to what he considered to be merely an extension of his life-work against the agents of the Comintern. What he discovered after living and working in official Washington for four years was that the nation¹s capital was, in truth, what he once humorously claimed sounded like a cross between a zoo and a lunatic asylum. His journals, in addition to personal letters, various reports and other personal material, give a very clear, but not particularly flattering, view of the inmates of both the zoo and the asylum.

Müller moved, albeit very carefully, in the rarefied atmosphere of senior policy personnel, military leaders, heads of various intelligence agencies and the White House itself. He was a very observant, quick-witted person who took copious notes of what he saw. This was not a departure from his earlier habits because Heinrich Müller had always kept a journal, even when he was a lowly Bavarian police officer, and his comments about personalities and events in the Third Reich are just as pungent and entertaining as the ones he made while in America.

The reason for publishing this phase of his eventful life is that so many agencies in the United States and their supporters do not want to believe that a man of Müller¹s position could ever have been employed by their country in general or their agency in specific.

Wednesday, 7. February, 1951.

I have completed the negotiations with Angleton concerning the Italian Foreign Office papers. There are nearly 15,000 pages there that the Gestapo seized in Rome from the Italian FO in the Palazzo Chigi in 1943.

Kappler (the head of the SS and police in Rome, ed.) grabbed them on Ribbentrop’s orders and they were shipped to Berlin for evaluation. After the 20th of July, we took custody of them and I later had them hidden in the walled-up cellar in a villa in Dahlem along with the rest of my files.

These were in a side room, also walled-up, and when we got my other records in 1948, I didn’t bother to tell them about the Italian files. These we got a few months ago and I brought them to the attention of Angleton because of his intense interest in Italy.

After all, he had lived there with his family once and then during the war, was with the OSS in Sicily where he acted as a middleman between the U.S. government and the Sicilian Mafia. He dealt with Luciano at the time and is still believed to have very strong connections with both the Italian and American Mafias. When I showed him some sample pages of the Chigi papers, he became very interested and wanted to get them.

I found out that there were Italian police reports in there about the Mafia in Sicily. Mussolini hated them and was trying to eradicate them from Italy. Of course, Angleton wants them to help his friends and I am willing to oblige. He does not know that I am aware of his connections and his stupid lie that he wants to “have an overview of Italian history” is sheer nonsense.

When I told A. that these files would cost the CIA a quarter of a million dollars, he didn’t twitch an eyelid. There is a great deal of money lying around and he paid it without protest…and in cash! Of course I have a microfilmed copy of the lot!

This is what happens when an intelligence agency speaks in hushed tones about “National Security”, gets huge sums of money from a gullible, and often frightened Congress, and knows with great glee that they won’t have to account for a pfennig of any of it.

My God, they do steal at that!

“It costs money to send my son to Harvard,” they say with a wink as they stuff their briefcases with big bills. Also, do not forget that sun porch on the summer home up on Lake Vagina or even the summer home itself.

Of course the Government pays for their cars and all the expensive and useless trips they and their wives take to Lisbon, London and Paris. Here, they get to inspect the local office, meet with important whores (if their wives aren’t along) and manage to get drunk on very expensive vintage wines. If they go to England, they drink piss-warm beer and eat food that would gag a hyena but then they can buy a suit (on the expense account of course) on Saville Row and cohabit with tarts in phone kiosks while talking to their wives about the wonderful show at the Buckingham Palace when the guard was changed.

Actually, I would prefer to work with the Mafia if I had to deal with the criminal element. I understand that they, at least, have a code of honor. My associates certainly do not.

What will I do with all the money?

Why go to Cuba as the emissary of Colonel Behn and enjoy myself at the casinos and other places. As a note here: The CIA operation in Cuba is run by some demi-intellectual snob with fewer brains than a piss ant. If you gave a white mouse a Harvard degree, they would make him station chief in Mexico! Of course there will be a good deal of Angleton’s money left over to use on the furnishings for my chapel. I suppose this is what they mean by the difference between the Sacred and the Profane. The place is a wreck and very close to the road but it ought to be rebuilt. If it proves to be too much of a chore, we will use one of the rooms in the main house. (In the event, the ruined chapel is still in ruins and can be seen today as a heap of stones beside the road. ed.)


Populist Anger Upends Politics on Both Sides of the Atlantic

June  24, 2016

by Jim Yardley

New York Times

LONDON — From Brussels to Berlin to Washington, leaders of the Western democratic world awoke Friday morning to a blunt, once-unthinkable rebuke delivered by the flinty citizens of a small island nation in the North Atlantic. Populist anger against the established political order had finally boiled over.

The British had rebelled.

Their stunning vote to leave the European Union presents a political, economic and existential crisis for a bloc already reeling from entrenched problems. But the thumb-in-your-eye message is hardly limited to Britain. The same yawning gap between the elite and mass opinion is fueling a populist backlash in Austria, France, Germany and elsewhere on the Continent — as well as in the United States.

The symbolism of trans-Atlantic insurrection was rich on Friday: Donald J. Trump, the presumptive Republican presidential nominee and embodiment of American fury, happened to be visiting Britain.

“Basically, they took back their country,” Mr. Trump said Friday morning from Scotland, where he was promoting his golf courses. “That’s a good thing.”

Asked where public anger was greatest, Mr. Trump said: “U.K. U.S. There’s plenty of other places. This will not be the last.”

Even as the European Union began to grapple with a new and potentially destabilizing period of political uncertainty, the British vote also will inevitably be seized upon as further evidence of deepening public unease with the global economic order. Globalization and economic liberalization have produced winners and losers — and the big “Leave” vote in economically stagnant regions of Britain suggests that many of those who have lost out are fed up.

Time and again, the European Union has navigated political crises during the past decade with a Whac-a-Mole response that has maintained the status quo and the bloc’s lumbering forward momentum toward greater integration — without directly confronting the roiling public discontent beneath the surface.

But now the question is whether the dam has broken: Before breakfast on Friday, anti-Europe leaders in France and the Netherlands were rejoicing and demanding similar referendums on European Union membership.

Victory for liberty!” declared the far-right French leader Marine Le Pen, writing on Twitter, who changed her profile picture to an image of the Union Jack.

It is not clear whether the message is getting through to more establishment leaders on both sides of the Atlantic, or what lessons they are taking from the shock of the British exit.

Perhaps the liberal Democrats in the House who staged a clamorous sit-in Wednesday night in Washington, while part of the system themselves, were channeling the populist anger of the American left in their willingness to break the rules to make a point about the need for gun control. In Brussels, many member governments appear divided between an instinct to respond to the British referendum vote by driving for greater integration among Germany, France and other core members of the bloc and a willingness to moderate their ambitions in recognition of public opposition.

European leaders were under pressure to reassure the European public, and the world, that the bloc was not at risk of unraveling. For decades, the European Union had moved forward, always expanding in size and influence. Britain has now reversed that trend.

“We’re completely in uncharted territory,” said Hans Kundnani, a Berlin-based expert in European politics at the German Marshall Fund of the United States.

Mr. Kundnani said the British vote exposed a contradiction at the core of the European project. European leaders define success as steering member states toward greater political and economic integration. And many of the bloc’s inefficiencies and dysfunctions can be traced to the unfinished work of strengthening European institutions and achieving greater integration between member states in areas such as banking, finance, security and defense.

But public opinion is deeply skeptical of this “more Europe” agenda. Far-right populist leaders have stoked public anxieties and resurgent nationalism by lashing out against immigrants, while portraying the European capital, Brussels, as a bastion of political elites out of touch with the concerns of ordinary people. Far-left populists have demanded a re-examination of the neoliberal economics of free trade and limited regulation, while resisting efforts to deconstruct the social democratic welfare state.

“The E.U. robs us of our money, our identity, our democracy, our sovereignty,” said Geert Wilders, the leader of the Dutch far-right Party for Freedom. “The elites want more E.U. They think they know better than the people. They look down on the people and want to decide in their place. They want us to be ruled by undemocratic, unaccountable bureaucrats in a faraway place like Brussels.”

And permeating everything is the weak Continental economy and the crippling debt burden across Southern Europe.

“The E.U. is kind of trapped,” Mr. Kundnani said. “On the one hand, the instinct will be to move ahead with further integration and reassure the rest of the world that the European Union is not unraveling. But that is very difficult because of the fault lines that exist.”

He added: “They are trapped because moving ahead is very difficult. Moving backwards is the last thing they want to do. And the status quo is unsustainable.”

Britain has always been a skeptical member of the European household. During the 1990s, Britain chose to keep the pound and not to join the countries sharing a common European currency, the euro. Many of the British concerns about the euro proved true, undermining the bloc’s credibility, even as Britain has remained mostly insulated against the Continent’s still unresolved euro crisis.

Before the referendum, some European officials portrayed Britain as an idiosyncratic case that should not be seen as a bellwether for the Continent. But that is a hard argument to make. In France, Ms. Le Pen’s far-right National Front party is experiencing steadily rising popularity as the country prepares for national elections next year. In Germany, the anti-immigrant Alternative for Germany polled strongly in recent state elections.

Right-wing leaders in Hungary and Poland are hostile to immigrants, while critics say the governments of those countries are also rewriting national laws to undermine democratic checks and balances. In Italy, the anti-establishment Five Star Movement scored major victories last Sunday by winning mayoral elections in Turin and, more important, in the capital, Rome.

Donald Tusk, one of the European Union’s top leaders, has started to talk about the risks facing the political establishment. At a speech last month before Europe’s coalition of center-right political parties, Mr. Tusk cautioned his fellow political elites.

“Obsessed with the idea of instant and total integration, we failed to notice that ordinary people, the citizens of Europe, do not share our euro-enthusiasm,” said Mr. Tusk, the president of the European Council, which comprises the heads of state of all the 28 member states in the bloc. “Disillusioned with great visions of the future, they demand that we cope with the present reality better than we have been doing until now.”

Yet taking action may be difficult, since most analysts say the European Union is paralyzed by the coming national elections in 2017 in France and Germany, the two most powerful countries in the bloc. Neither the French nor the German government is eager to endorse sweeping initiatives for more European integration before the elections out of fear of a populist whipping at the polls.

“Europe is very divided and the main European country, Germany, has no will or skills to lead the union — and is approaching important national elections,” said Lucio Caracciolo, the editor of the Italian geopolitical magazine Limes. “France is a country in crisis, while Italy has its own problems. I can’t see who would assume a European leadership capable of producing a deeper integration process.”

He added: “There is a very widespread rejection of politics everywhere. There is a similar mood in the United States, an antipolitical sentiment.”

Few industries in Britain are likely to be more directly hit than the financial services industry in London. Damon Hoff, a hedge fund manager, said that he had voted to stay in the European Union, but that he understood the sentiments of those who had voted to leave.

“Europeans don’t feel more prosperous,” he said. “Europeans don’t feel more empowered. And certainly the British don’t.”

He added: “You want to be part of something that continuously evolves. Does the European Union feel like it is evolving? No.”

The Rape of Russia

by Harry von Johnson, PhD

With the fall of CIA-friendly Boris Yeltsin in December of 1999 the United States had an opportunity to help transform the economically stifled Russia into a pro-Western country. They lost their opportunity in an orgy of economic rape carried out by cooperating entities in the United States, Israel and Russia. These entities consisted of international oil companies, far right American Russian-hating groups, a thoroughly dishonest American president and a number of Jewish groups and individuals and businesses inside and outside of Russia. They were aided and abetted by corrupt Russian politicians and businessmen and assisted by prominent Wall Street bankers and such diverse entities as the U.S. Treasury and the Harvard Institute for International Development, ably assisted by fellow travelers and manipulators at Nordex, the IMF, the World Bank, the Bank of New York and the Federal Reserve.

The losers were the Russian people and millions of U.S. tax-payers.

The first mistake was the West’s perception of the elected Russian president, Boris Yeltsin; whom American propagandists saw as a great democrat determined to destroy the Communist system for the good of the world. Yeltsin’s first task was to transform self-interested rabble into a viable constituency that would approve his actions, actions completely dictated by Western financial and political powers. The IMF cash was designed solely to assist certain targeted elements of Russian national asset,. mainly oil and gas and this influx of Western money provided Boris Yeltsin the initial wherewithal to purchase his constituency of ex-Komsomol Communist Youth League bank chiefs, who were, as a reward, given the freedom and the mechanisms to plunder their own country in tandem with a resurgent Russian criminal class, almost entirely composed of Russian Jews.This newly created economic elite learned everything about the confiscation of wealth, but nothing about its creation. Worse yet, this new elite thrived in the conditions of chaos and eschewed the very stability for which the United States so fervently hoped for. Consequently, Yeltsin’s “reform” government was doomed from its inception to be entirely controlled by a combination of American money and crooked Russian street criminals, later known as the Oligarchy.

One particularly striking aspect of Bill Clinton’s presidency was how aggressively his administration worked to capture the political support of the financial sector, offering up heretofore scarce US government favors. A disproportionate number of firms receiving OPIC (Overseas Private Investment Corporation, a government entity) guarantees, Export-Import bank lending, and IFC (International Finance Corporation, the private lending arm of the World Bank) and Russian Enterprise Fund participation were, and had to be, generous contributors to both Clinton campaign coffers and the DNC.

The basic formula was simple. The bread and butter of all financial markets are bonds. Wall Street wanted a debt market. If the Clinton Administration set up the machinery, Wall Street would come and cooperate.

During the Cold War, the International Monetary Fund was repeatedly involved in all manner of financial plans in the West’s effort to contain, or better, destroy, the Soviet empire. But the IMF’s excesses were of little concern to Washington and the American business oligarcny so long as its financial firepower could be directed at whatever nation appeared on the verge of toppling into the Soviet camp.

But weren’t Americans told that Russia’s financial oligarchy paid for Yeltsin’s re-election? To the contrary, Russia’s bankers made serious money on Yeltsin’s electoral weakness by buying Russian government bonds at distressed prices using cheap money handed over from government deposits. The lion’s share of the domestic bonds’ high yields have always been paid with IMF loans. Russia’s first representative to the World Bank, Leonid Grigoriev, explained, “Of course, the government was to return this money and that is why the yields on 3-month paper reached as much as 290 percent. The government’s paying such huge, impossible rates on treasury bills, well, it’s completely unbelievable. It had nothing to do with the market and therefore such yields can only be understood as a payback, just a different method.”

Instead of putting her faith in crooked Russian politicians and elevated street thugs, the United States ought to have taken a longer view and considered the needs and numbers of the Russian citizenry. Yet, thanks to Boris Yeltsin’s thirst for power and megalomaniacal inadequacy, Russia almost became the victim of American expediency and of a culturally hollow and economically predatory globalism.

Consequently, Americans, who thought their money was helping a stricken land, have been dishonored; and the Russian people who trusted us at one point are now strongly anti-American

Let us now consider the role of the Bank of New York.

America’s first established bank, founded by Alexander Hamilton, this bank fell into the hands of Israeli speculators and avowed assistantce to their co-religionists in Russia. They laundered millions of dollars of Russian gang money and returned it to Russia to help buy up Russian natural assets which had been de-nationalized

One analyst estimated that the $10 billion laundered in one year alone constituted fully 6 percent of the Russian gross domestic product, and 40 percent of the Russian federal government’s budget. And this is only the sum that passed through one channel over a one year period.

In mid-1998 British officials investigating Russian organized criminal activities brought the attention of US authorities to a link between YBM Magnex, a front company for suspected Russian gangster Semyon Yukovich Mogilevich, and Benex, a firm owned by Peter Berlin, the husband of one of the subsequently-suspended Bank of New York vice-presidents. From October 1998 to March 1999, $4.2 billion in suspect money passed through the Bank of New York accounts of Benex and other firms. Investigators allowed the account to remain open after March of 1999 as they continued their probe, and the total amount laundered eventually proved to be in excess of $10 billion.

In August 1999, Swiss banks in Geneva discovered massive fraud involving Swiss banks and local prosecutors immediately froze 22 accounts of Russian individuals and corporate entities, worth a total of $15 million.

The massive concrete evidence of  international criminal wrongdoing extended far beyond suspected organized crime figures like Mogilevich and pointed to high-level officials in the both the US and Russia. Investigators began to look into whether funds from the subsequently insolvent Russian bank, Menatep, were also involved in money laundering at the Bank of New York. Menatep was then owned by Russian oligarch Mikhail Khodorkovsky who employed, as a senior executive, Konstantin Kagalovsky.

Federal officials, in the main, the New York office of the FBI in conjunction with their counterparts in Britain and Switzerland, launched an in-depth an investigation of what later proved to be the largest money-laundering scheme in US history. The investigation revealed that billions of dollars from Russia, the bulk of it from Russian criminal elements, were channeled through accounts at the Bank of New York. Two Bank of New York vice-presidents were initially suspended as a result of the probe.

Semyon Yudkovich Mogilevich was born into a middle-class Jewish family in Kiev on June 30, 1946, to Genya Tevevna Shepelskaya and Yudka Mogilevich. At the age of 22, Mogilevich earned an advance degree in economics from the prestigious University of Lvov. “He was a brilliant student” recalls one of his former professors – “he had a photographic memory and he could multiply, divide and add seven digit numbers in his head instantaneously.” Another former professor said that Mogilevich had a great interest in macroeconomics and “was able to see a panoramic picture of national and world economies, everybody believed he would become a great academician.”

Mogilevich utilized the aliases Seva Moguilevich, Semon Yudkovich Palagnyuk, Semen Yukovich Telesh, Simeon Mogilevitch, Semjon Mogilevcs, Shimon Makelwitsh, Shimon Makhelwitsch, and “Seva”, according to the FBI.

Mogilevich masterminded the great oil swindle in which official agencies like the International Monetary Fund and the World Bank, along with the Israeli-controlled Bank of New York, sent huge sums of money to the so-called “oligarchs” who successfully bought up the Russian oil and gas industry. They were, in essence, being paid for a controlling interest in their holdings. These oligarchs were all men with previous criminal backgrounds in drug sales, prostitution, extortion, espionage and money laundering.

Besides their criminal records, the oligarchy all were Jewish and most held dual Russian/Israeli citizenship.

When the alcoholic and increasingly erratic Yeltsin was persuaded by his Western friends to step aside from the levers of power, American intelligence agencies, as usual misguided (The CIA put Fidel Castro up as a successor to the uncooperative Cuban dictator Batista!) suggested that a Vladimir Putin, former KGB officer and a minor staff member of the Yeltsin government, might be a perfect front man.

This proved to be a major disaster for the Western economic controllers.

Between 2000 and 2004, Putin set about reconstruction of the impoverished condition of the country, successfully winning a power-struggle with the Russian oligarchs, reaching a pragmatic agreement with them. This bargain allowed the oligarchs to maintain most of their financial portfolios, in exchange for their explicit support for – and alignment with – Putin’s government. A new group of business magnates emerged, including Gennady Timchenko, Vladimir Yakunin, Yury Kovalchuk, Sergey Chemezov, with close personal ties to Putin. The former all-powerful oligarchs either cooperated with Putin’s economic programs of fled the country, taking as much of their wealth with them as they could. Some of those who opposed him ended up in prison, some died under odd circumstances and others fled to the safety of Israel.

Putin,in short, took control of Russia’s economy, slowly but surely neutralized the oligarchs and began to develop the immense Siberian oil and gas fields.

His growing successes in these fields so enraged Western economic and political groups that then embarked on economic warfare on Russia.

A CIA attempt to take control of the Ukraine failed to achieve any success and left the Ukraine impoverished and powerless.

In short, the economic rapists of a prostrate Russia were thwarted by Putin who then went on to expand Russian influence in the oil-rich Middle East with a series of movements that has left his enemies in the West increasingly powerless.

Nexit, Frexit or Italeave? British vote fires up EU’s ‘Outers’

June 24.2016

by Dominic Evans and Marton Dunai


LONDON/BUDAPEST-Britain’s vote to leave the European Union fired up populist eurosceptic parties across the continent on Friday, giving fresh voice to their calls to leave the bloc or its euro currency.

Right-wing and anti-immigrant parties in the Netherlands, Denmark, Sweden and France demanded referendums on membership of the union, while Italy’s 5-Star movement said it would pursue its own proposal for a vote on the euro.

Geert Wilders, leader of the Dutch anti-immigrant PVV party, said he would make a Dutch referendum on EU membership a central theme of his campaign to become prime minister in next year’s parliamentary election.

“I congratulate the British people for beating the political elite in both London and Brussels and I think we can do the same,” Wilders told Reuters. “We should have a referendum about a ‘Nexit’ as soon as possible.”

On Thursday, Britons voted to leave the 28-nation EU, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow to the European project of greater unity since World War Two.

“There is no future any more (for the EU),” Wilders said.

France’s far right National Front party also called for a French referendum on European Union membership, cheering a Brexit vote it hopes can boost its eurosceptic agenda.

Party leader Marine Le Pen celebrated the result by displaying the British flag on her Twitter page.

“Victory for freedom!” she said. “We now need to hold the same referendum in France and in (other) EU countries.” Her deputy, Florian Philippot said: “Our turn now #Brexit #Frexit.”

Le Pen said last month that if she won next year’s French presidential election she would immediately start negotiations on a series of sovereignty issues including the single currency. If those failed, she would ask voters to back leaving the EU.

She is the front-runner among likely candidates ahead of the vote, although polls see her losing the run-off.

Analysts and a few FN officials and allies have said its protectionist, anti-euro policy was partly to blame for holding the party back in the past. But the Brexit vote could help it overcome this, Ifop pollster’s analyst Frederic Dabi said.


The populist anti-immigration Danish People’s Party (DF), an ally of Denmark’s right-leaning government, also called for a referendum on membership of the European Union.

“I believe that the Danes obviously should have a referendum on whether we want to follow Britain or keep things the way we have it now,” DF party leader Kristian Thulesen Dahl said.

The DF is not in government but is one of three parties supporting the one-party administration. Its call for a popular vote was echoed by the head of the left-wing Red-Green Alliance.

Prime Minister Lars Lokke Rasmussen rejected the calls, but acknowledged that the British vote raised the possibility of a “slimmer EU”.

In Sweden, the anti-immigration party the Sweden Democrats, which has the support of around 17 percent of voters according to a poll last month, said it would step up pressure for change.

“We demand that Sweden immediately starts to renegotiate the (EU) deals we have made and that the Swedish people will be able to speak up about a future EU-membership in a referendum,” party leader Jimme Akesson said.

Austria’s far-right Freedom Party (FPO) called for the heads of the European Commission and European Parliament to resign after the Brexit vote, and said it may also call for a referendum unless the EU is reformed.

Italy’s second most popular party, the opposition 5-Star Movement described the result as a lesson in democracy and promised to pursue its own proposal for an Italian referendum on the euro.

The party, considered a genuine contender for government at the next general election, wants Italy to hold a “consultative” or non-binding referendum on whether to remain in the euro zone.

“Whether you like it or not the British people have chosen,” said lower house deputy Alessandro Di Battista, a member of 5-Star’s leadership committee.

The right-wing Northern League, a member of Italy’s opposition center-right, was more outspoken. “Thank you Great Britain, next it is our turn,” party leader Matteo Salvini said.

(Reporting by Martin Dunai in Budapest, Ingrid Melander in Paris, Teis Jensen in Copenhagen, Gavin Jones in Rome and Kirsti Knolle in Vienna; Writing by Dominic Evans; editing by John Stonestreet)

 Brexit a historic slap in the face for US foreign policy

The US has always staunchly advocated Britain’s EU membership. That’s why Brexit supporters who thought that Britain’s leaving the EU wouldn’t affect – or could improve – ties with the US are in for a negative surprise.

June 24, 2016


Today is not a good day for the much touted, but steadily loosening, “special relationship” between the United States and Great Britain. Coined by Winston Churchill 70 years ago, the term highlighted the unique ties between the countries. The special bond endured through World War II and the ensuing Cold War and only started showing real signs of strain during the Iraq War. Since then the relationship between the US and UK has remained cool, but both partners have still shared a common philosophy and outlook on key political and economic issues.

But the decision by British voters to exit the European Union has dealt a serious blow to the special ties between Washington and London. A strong and united Europe is a central pillar of US foreign policy. Britain, acting as a kind of natural proxy, always played a crucial role in ensuring European unity and representing common UK-US interests and ideas vis-a-vis the continental Europeans. With Britain leaving the EU, this indirect but important leverage and influence will be gone.

“From that point of view, it’s really a historic defeat of American foreign policy,” said John Harper, professor of US foreign policy at Johns Hopkins University’s School of Advanced International Studies in Bologna. “It’s quite a historic moment in a negative sense for American foreign policy.”

Contrary to what many Brexit supporters may believe, the UK’s exit from the EU will make it less important for the US in both political and economic terms. Economically London will now have to negotiate its own new trade agreements with Washington – a prospect that many in the US have warned will not necessarily be a priority for administrations busy with more pressing affairs.

“Britain will have to get in line and won’t be at the front of the line when it comes to negotiating new tariffs and trade deals,” said James Davis, dean of the School of Economics and Political Science at St. Gallen University in Switzerland.

As far as economic issues are concerned, Davis said, the US is going “to focus first and foremost on relations with the EU. It’s a huge market that still dominates trade in a way that a market of 60 million Britons will not.”

Brexit voters who thought that their country could get a better deal economically from the US by going it alone than as an EU member are mistaken, Harper said: “The Americans have said clearly, ‘Don’t expect any favors from us.'”

Germany gains clout

When and if the United States is ready to hammer out new trade agreements with Britain, it will not be a partnership among equals like US-EU trade deals, but between a big player and a small one. “If the people who have voted for Brexit expected that their economic conditions are going to improve, I am afraid they are in for a disappointment,” Harper said.

Britain’s political clout with the US, which has already suffered from London’s decision to stay on the sidelines of many key EU issues, will only decrease following the decision to leave. With Britain out of the EU, it can no longer play its traditional role as a trans-Atlantic voice on the continent. As a consequence, Washington will focus its efforts even more than it has already on the only powerful ally still standing in the EU: Germany.

“I think the US is going to look at Angela Merkel as their only real partner in the EU today,” Davis said. “The efforts of France and others on the southern tier to turn the EU into a more protectionist market towards the rest of the world can only be counterbalanced if you have a strong counterweight in Berlin. So I think for the US Angela Merkel becomes even more important.”

Second fiddle

As Germany will on political and economic issues, NATO will gain in stature for Washington when it comes to security and military matters. Britain, however, will have to get used to playing second fiddle to the European Union in Washington.

After the Brexit the United States will concentrate its political energy not on holding the UK’s hand, but on preventing what it now considers the biggest challenge for US foreign policy in Europe: the potential unraveling of the EU should other countries follow Britain’s example.

“That is the real nightmare for the United States,” Harper said.


Sinn Fein calls for Irish unity poll as Brexit fallout begins

June 24, 2016

by Padraic Halpin


Dublin-Northern Ireland’s deputy leader Martin McGuinness called on Friday for a vote to unite the two sides of the Irish border as stocks tumbled in the economic and political fallout from Britain’s decision to quit the EU.

Ireland has the EU’s fastest-growing economy but also more to lose from Brexit than any other member state, with far-reaching implications for its trade, economy, security of energy supplies and peace in British-ruled Northern Ireland.

After 56 percent of Northern Irish voters sought to remain in the EU compared to the 52 percent of the United Kingdom as a whole who voted to leave, Sinn Fein’s McGuinness demanded that London call a referendum on a united Ireland.

“The British government now has no democratic mandate to represent the views of the North in any future negotiations with the European Union and I do believe that there is a democratic imperative for a ‘border poll’ to be held,” McGuinness told national Irish broadcaster RTE.

“The implications for all of us on the island of Ireland are absolutely massive. This could have very profound implications for our economy (in Northern Ireland).”The call from Sinn Fein, Northern Ireland’s largest Irish nationalist party, was rebuffed by pro-British First Minister Arlene Foster and Irish Prime Minister Enda Kenny, who said there were much more serious issues to deal with.

Kenny called an emergency cabinet meeting shortly after the result and afterwards published a plan his government had prepared in advance, listing actions it would take over trade, investment, British-Irish relations and Northern Ireland.


Ireland’s central bank had warned that a withdrawal would hurt economic growth and jobs and significantly impact the financial sector, while a government-commissioned report found it could cut trade with Britain by at least 20 percent.

Irish banks, whose exposure to the UK accounts for around 21 percent of total assets, led the Irish stock market eight percent lower, with shares in Bank of Ireland and permanent tsb down 25 percent and 21 percent down at 1345 GMT.

Europe’s largest airline by passenger numbers Ryanair, building materials group Kingspan and packaging producer Smurfit Kappa also fell sharply. The local bourse was down by as much as 16 percent earlier on Friday.

The yield on Ireland’s benchmark 10-year bonds [IE10YT=TWEB] was marginally higher at a near record low 0.84 percent. The country’s debt agency said its funding position was strong with limited financing needs for the rest of the year and through the first half of 2017.

The cost of insuring exposure to Irish government debt nearly doubled on Friday, surging to the highest level in nearly 2-1/2 years.

Finance Minister Michael Noonan, who earlier this week said an estimated cumulative Brexit-related hit on the Irish economy of as much as 1.6 percent of GDP would be “containable”, said the outcome would not derail his immediate budget plans.

“There is nothing catastrophic for Irish fiscal policy on the horizon,” Noonan told national broadcaster RTE with the caveat that the hit to economic growth could limit his budget plans beyond 2018.

Investec Ireland said it will likely cut its GDP forecasts for 2016 and 2017 that are currently in line with government predictions of 5 and 4 percent, calling the referendum result “unambiguously negative” for the Irish economy.

Davy Stockbrokers said that while it did not think a Brexit will be sufficient to push Ireland into recession, it could lower growth by 1 to 2 percent in both years.

Ratings agency S&P said Brexit had no immediate impact on Ireland’s sovereign ratings and it expected the Irish economy to stay resilient enough to withstand the negative impacts.

Brexit may not be all bad for Ireland, and Noonan said there may be some upside if companies keen to stay in the EU moved to Dublin from London. The contingency plan calls for marketing efforts to be intensified in sectors like financial services for firms wanting to be based in the EU.


But of most concern to Dublin is the impact on Northern Ireland, which has the only land frontier between the UK and the rest of the EU. It was marked by military checkpoints until a 1998 peace deal ended three decades of sectarian violence.

Foreign Minister Charlie Flanagan told Reuters this week that the reintroduction of a hard border would have to be considered in any negotiation and that the return of controls, for customs or security, could pose a difficult challenge for the peace process.

The dismantling of military border posts was a key aspect of the peace deal between Catholic nationalists seeking a united Ireland and Protestant unionists who wanted to keep Northern Ireland British. Over 3,600 died in the conflict.

Kenny said Ireland would do its utmost to keep the country’s decades-old common travel area with Britain. His plan says that options for possible customs and excise controls, including the role of modern technology, would be analysed with a view to minimising trade restrictions.

(Additional reporting by Amanda Ferguson in Belfast; Editing by Stephen Addison)

Brexit: Nicola Sturgeon says second Scottish independence vote ‘highly likely’

June 24, 2016


Scotland’s first minister has said a second independence referendum is “highly likely” after the UK voted to leave the EU.

Nicola Sturgeon said it was “democratically unacceptable” that Scotland faced the prospect of being taken out of the EU against its will.

She said the Scottish government would begin preparing legislation to enable another independence vote.

Scotland voted in favour of the UK staying in the EU by 62% to 38%.

The UK as a whole has voted to leave, by a margin of 52% to 48%, prompting UK Prime Minister David Cameron to announce he would stand down by October.

Calais mayor wants French migrant camps moved to UK after Brexit vote

June 25, 2016


The mayor of Calais is calling for a revision of the border deal between France and the UK, saying migrant camps located on the French side of the English Channel should be moved to Britain, which must feel full consequences of its decision to leave the EU.

The British must take the consequences of their choice,” mayor of Calais Natacha Bouchart said on Friday.

“We are in a strong position to push, to press this request for a review and we are asking the president [Francois Hollande] to bring his weight [to the issue],” she told French broadcaster BFM TV. “It is we who accept the hot potato.”

According to the mayor, the UK decision to leave the EU undermines the so-called Touquet deal reached between the two countries in 2003 which defined the rules of border control between France and Britain. The agreement stipulated that France would carry out border checks in Calais to intercept those seeking to make illegal crossings to the UK.

Bouchart stressed that the deal required negotiation due to Brexit referendum results, saying “there must be an element of division, of sharing.”

The suspension of the agreement would affect the biggest French refugee camp known as the ‘Jungle’ which houses over 3,500 people.

Xavier Bertrand, the center-right president of the Hauts-de-France region expressed the same stance.

“The English wanted to take back their freedom, they must take back their border,” he said. Earlier this year he referred to the Touquet treaty as “obsolete and outdated,” according to French media.

Prior to the referendum French government minister also warned of the “consequences” of Brexit.

The day this relationship unravels, migrants will no longer be in Calais,” Finance Minister Emmanuel Macron said in February.

French Interior Minister Bernard Cazeneuve, however, doubted the agreement between the two countries would collapse.

“Calling for the border with the English to be opened is not a responsible solution,” Cazeneuve announced earlier this year. “It would send a signal to people smugglers and would lead migrants to flow to Calais in far greater numbers. A humanitarian disaster would ensue.”

Meanwhile French government spokesman Stephane Le Foll announced that Brexit vote would in no way affect bilateral immigration agreements.

“On the question of immigration, to be clear, British exit from the European Union will not lead to changes in terms of immigration treaties with United Kingdom… These are bilateral treaties,” he said.

‘Brexit’ Aftershocks: More Rifts in Europe, and in Britain, Too

June 24, 2016

by Steven Erlanger

New York Times

LONDON — Britain’s startling decision to pull out of the European Union set off a cascade of aftershocks on Friday, costing Prime Minister David Cameron his job, plunging the financial markets into turmoil and leaving the country’s future in doubt.

The decisive win by the “Leave” campaign exposed deep divides: young versus old, urban versus rural, Scotland versus England. The recriminations flew fast, not least at Mr. Cameron, who had made the decision to call the referendum on membership in the bloc to manage a rebellion in his own Conservative Party, only to have it destroy his government and tarnish his legacy.

The result of the so-called Brexit vote presented another stiff challenge to the leaders of the other leading European powers as they confront spreading populist anger. It was seized on by far-right and anti-Brussels parties across Europe, with Marine Le Pen of the National Front in France calling for a “Frexit” referendum and Geert Wilders of the Party for Freedom in the Netherlands calling for a “Nexit.”

European officials met in Brussels to begin discussing a response and to emphasize their commitment to strengthening and improving the bloc, which will have 27 members after Britain’s departure.

“At stake is the breakup, pure and simple, of the union,” Prime Minister Manuel Valls of France said, adding, “Now is the time to invent another Europe.”

Germany urged calm. “Today marks a turning point for Europe,” Chancellor Angela Merkel said. “It is a turning point for the European unification process.”

With all votes counted, Leave was ahead by 52 percent to 48 percent, an enormous snub to Britain’s elite.

The process of withdrawal is likely to play out slowly, perhaps taking years. It will mean pulling out of the world’s largest trading zone, with 508 million residents, including the 65 million people of Britain, and abandoning a commitment to the free movement of labor, capital, goods and services. It has profound implications for Britain’s legal system, which incorporates a large body of regulations that cover everything from product safety to digital privacy, and for Britain’s economy.

The main ways in which the change will be felt are on trade — Britain will lose automatic access to the European single market — and on immigration, with Britain no longer bound to allow any European Union citizen to live and work in the country. Britain will have to try to negotiate new deals covering those issues.

To those in Britain who supported remaining in Europe, the result of Thursday’s in-or-out referendum was a painful rejection, leaving the country exposed to a possible economic downturn and signaling a step away from the multiculturalism that they say has made Britain among Europe’s most vibrant societies.

To backers of leaving, the outcome was vindication of their belief that Britain could pursue an independent course in the world, free of the Brussels bureaucracy and able to control the flow of immigrants into the country.

“Dare to dream that the dawn is breaking on an independent United Kingdom,” Nigel Farage, the leader of the U.K. Independence Party, one of the primary forces behind the push for a referendum on leaving the European Union, told cheering supporters just after 4 a.m.

For Mr. Cameron, the results were a humiliating disaster, forcing him to announce his departure only 13 months after he won re-election behind a surprisingly large Conservative majority in national elections. Critics said that he had led Britain out of Europe for no good reason and that the unity of the United Kingdom itself was threatened, with Scotland now more likely to try again to bolt.

Speaking in front of 10 Downing Street early Friday, with his wife, Samantha, standing nearby, Mr. Cameron said he would resign once a new leader had been chosen by his party, a decision he expected by October. He will stay now to provide stability, but a new prime minister, he said, should formally begin Britain’s withdrawal from the European Union and negotiate the terms of that divorce.

I held nothing back,” Mr. Cameron said. His voice breaking, he said, “I love this country and I feel honored to have served it.”

His statement created an immediate churn in the political waters, with speculation that the two Conservatives most likely to succeed him are Boris Johnson, the flamboyant former mayor of London who helped lead the Leave campaign, and Theresa May, the Home secretary, who supported Mr. Cameron and Remain, but concentrated on doing her job rather than campaigning.

Mr. Johnson was booed Friday morning as he left his home in London, which voted overwhelmingly for Remain. In a brief statement later, Mr. Johnson praised Mr. Cameron, an old friend and rival from school days, as “an extraordinary politician” and said he was sad to see him go.

Mr. Johnson refused to answer questions about his own future but praised the result. “We can find our voice in the world again, a voice that is commensurate with the fifth-biggest economy on earth,” he said.

But if Britain’s Treasury and Central Bank are to be believed, the economic hit the country will take from leaving the single market of the European Union will be considerable, with permanent loss of economic growth, higher unemployment and lower tax receipts.

The immediate market reaction was an effort to find a floor in the midst of so much uncertainty, said Barrington Pitt Miller, an equity research analyst at Janus Capital. But he said he expected British economic growth to be zero or negative in the short and medium term, with a secondary impact over time as London’s financial services sector, which makes up about 10 percent of the economy, begins to move staff members and headquarters to Frankfurt, Paris or Dublin.

A lot will depend on how the European Union chooses in the end to respond — whether it is “vindictive, friendly or frightened,” he said.

Mr. Johnson and some in the Leave campaign argued that the other European nations valued trade with Britain so much that they would negotiate a special deal after Britain’s withdrawal to let Britain remain in the single market without having to guarantee freedom of movement and labor. That seems highly unlikely because it would only encourage other nations to pressure Brussels. But it may be that as the dust settles, some sort of association agreement with Britain could be negotiated, as Ms. Merkel suggested on Friday, though the price could be high.

The economy aside, the United Kingdom itself now faces a threat to its survival. Scotland voted by 62 percent to 38 percent to remain in the European Union, and the Scottish first minister, Nicola Sturgeon, said Friday that it was “democratically unacceptable” for Scotland to be dragged out of it against its will. Another independence referendum, she said, “is now highly likely.”

Appearing before reporters in front of the flags of Scotland and the European Union, Ms. Sturgeon, who leads the dominant Scottish National Party, said, “It is a statement of the obvious that the option of a second referendum must be on the table, and it is on the table.”

The threat is real, but any new vote will not come soon, because it is only two years since the last one, which the Scottish nationalists lost, and the price of oil, on which the Scottish economy largely depends, has dropped.

Northern Ireland, too, voted for Remain, although Protestants and Roman Catholics, as usual, were split. But the prospect of an open border with Ireland now becoming a hard border between the European Union and the United Kingdom will change matters and require checks of passports and goods, putting strain on the Good Friday peace agreement.

In England, which voted for Leave, there are obvious strains, too.

They can be found between the young who voted in large numbers for Remain and those over 45, who voted for Leave; between the cities and the countryside; between richer and poorer; and between better educated and less educated.

London itself, the glittering, expensive, multicultural and multinational global capital, with its many immigrants and liberal values, was isolated in a sea of those favoring Leave; in some sense, the vote was against the wealthy elites who live in London and rule everyone else from there.

Last, there is the chasm between political leaders, nearly all of whom backed Remain, and many of their voters, who rebuffed them.

Bronwen Maddox, former editor of Prospect Magazine and the new director of the Institute for Government, a research institution, said in an email that “there is a growing intolerance for representative government, which is likely to have consequences for the ability of any government to run the country.”

The referendum, she suggested, might have been about Brussels, but it revealed and unleashed many other forces. Those forces, she said, “have ejected the U.K. from the European Union; they may now wreak similar turmoil on the old political parties themselves.”

Correction: June 24, 2016 

An earlier version of this article misstated the percentage of the British economy represented by the financial services sector. It is 10 percent of the gross national product, not 80 percent.

Brexit vote sends a message to politicians everywhere: It can happen here

June 24, 2016

by Dan Balz

The Washington Post

LONDON — If anyone still needed a reminder that the phrase “it can’t happen here” should be struck from the lexicon of 2016, Britain’s historic Brexit referendum provided one more dramatic piece of evidence. The question is how Hillary Clinton and Donald Trump and their allies interpret the results of what did happen here.

The decision by British voters to take a leap into the unknown by severing ties with the European Union is by no means a reliable predictor of the eventual outcome of the presidential election in the United States. But neither was it an event without larger meaning.

Frustration with political elites knows no borders today. There are signs of it across Europe, just as there have been signs of it in the United States in recent campaign cycles. What erupted here this week is stirring elsewhere. It has defied conventional thinking and disrupted conventional analyses. Who’s to say there are no more significant shocks ahead?

Here’s one example of a connection between what happened in Britain and the rise of Trump in the United States: In Britain, nearly the entire political establishment was aligned in favor of staying in the European Union. The “remain” campaign was in some measure an effort by these political elites to scare rank-and-file voters with dire forecasts about what a post-Brexit economy might look like that included threats of spending cuts and higher taxes.

But when voters went to the polls, in a huge turnout, they either weren’t afraid of those forecasts or didn’t believe what they had heard because they had given up on the political leaders of their country. In either case, it was an explicit rejection of what they were being told and an embrace of their own instincts and personal experiences.

How does that relate to the presidential campaign? Ask Peter Hart, the Democratic pollster who has been conducting focus groups of Republicans, Democrats and independents in this and previous campaign cycles under the auspices of the Annenberg Public Policy Center of the University of Pennsylvania.

Outside Pittsburgh last week, he assembled a group of voters who fit the model of potential supporters of Trump. The session came after Trump had experienced a series of self-inflicted wounds — bad enough, Hart believed, to give people pause about supporting the New York billionaire.

What he found instead were people who were far more forgiving than he had expected. They were willing to ignore or dismiss his gaffes, to explain away his mistakes and to focus instead on something he did that they liked. “It just shocked me,” he said.

The Brexit vote is the kind of event that should make both the Clinton and Trump campaigns pause and take notice. As they began to respond Friday, it was clear that both had seized on aspects of the British result that reinforced some of their basic instincts.

Clinton issued a carefully worded statement respecting the decision of the British voters to break with the E.U. while restating the importance of the long-standing relationship between the two allies. She also said this as a way of trying to discredit her opponent: “This time of uncertainty only underscores the need for calm, steady, experienced leadership in the White House to protect Americans’ pocketbooks and livelihoods, to support our friends and allies, to stand up to our adversaries, and to defend our interests.”

Trump also touched on the close ties between the United States and Britain, but his statement highlighted themes quite different from Clinton’s, themes straight from his own message. “The people of the United Kingdom have exercised the sacred right of all free peoples,” he said. “They have declared their independence from the European Union and have voted to reassert control over their own politics, borders and economy.”

Arriving for the grand opening of his refurbished golf course in Scotland, Trump put it more bluntly. “They took their country back,” he said. “That’s a great thing.”

David Axelrod, the chief strategist in President Obama’s two campaigns, said some caution is needed in interpreting the meaning of the Brexit vote before knowing what, if anything, it means for American politics. But he cited two things of note for Clinton.

“One is, if this has negative implications for the U.S. economy between now and November, that’s a bad thing” for Clinton, he said. “Two, if it creates a sense of instability, that may be a good thing [for her] in an election where there’s a great deal of concern about whether Trump is up to handling crises.”

Trump ally Newt Gingrich, the former speaker of the House, cast the Brexit vote as an almost wholly positive outcome for the presumptive Republican nominee. “This vote is about national identity. It is about anti-bureaucracy in Brussels. It is about immigration, and it is about the right to promote your own future,” he said.

Gingrich added: “So Trump gets up this morning and says, ‘Anti-bureaucracy, anti-immigration, set your own destiny, fight for your own economic future and quit letting foreigners tell you what to do.’ That’s where Brexit works for him.”

Gingrich said Clinton can’t plan to fall back on her experience or a claim to be steadier in a crisis to counter Trump’s populist appeal. He pointed to her advocacy of intervention in Libya, her call for a reset with Russia and other aspects of her tenure as secretary of state. “She has a record,” he said. “She’s not just a candidate being reinvented.”

Axelrod conceded that in an anti-establishment environment, Clinton would have difficultly presenting herself as a change candidate: “At the end of the day, what she’s selling is confidence, stability, seriousness. . . . [Trump] certainly has tapped into those primal forces. The question is whether they’re strong enough to overcome serious questions about his temperament and preparedness.”

Conventional thinking suggests that Trump will somehow disqualify himself in the eyes of too many voters, a novice politician who doesn’t take seriously enough the role and responsibility of being a presidential nominee. But Hart said, “Obviously, if he has something to say, there’s an audience willing to listen to him

The parallels between Brexit and the U.S. presidential election only go so far. One is an up-or-down vote on a proposition, an idea, an action. The other involves more complicated judgments about individual candidates. Brexit was decided on the basis of a tally of the popular vote. Presidential races are decided by political geography and electoral votes.

But the broader message from the Brexit vote goes beyond the economic and political turmoil it has touched off here. This is a time of political instability in which the old anchors and guideposts have been dramatically weakened. Politicians who ignore this, who think conventionally, who don’t find ways to understand and address it, will be taking foolish and unnecessary risks.

EU leaders call for UK to leave as soon as possible

Presidents of European bodies say there will be no renegotiations and Britain must act on vote to avoid prolonging uncertainty

June 24, 2016

by Jennifer Rankin and Jon Henley in Brussels, Philip Oltermann in Berlin and Helena Smith in Athens

The Guardian

The EU’s top leaders have said they expect the UK to act on its momentous vote to leave the union “as soon as possible, however painful that process may be” and that there will be “no renegotiation”.

The presidents of the European council, commission and parliament – Donald Tusk, Jean-Claude Juncker and Martin Schulz respectively – and Mark Rutte, the prime minister of the Netherlands which holds the EU’s rotating presidency, said any delay to Britain’s exit would “unnecessarily prolong uncertainty”.

After emergency talks in Brussels, the four said they regretted, but respected Britain’s decision.

“This is an unprecedented situation, but we are united in our response,” they said in a joint statement.

While the UK – the first sovereign country to vote to leave – would remain a member until exit negotiations were concluded, they said, Europe expected it to “give effect to this decision … as soon as possible” by triggering article 50 of the Lisbon treaty, which is effectively Britain’s formal letter of resignation.

The special settlement negotiated by David Cameron earlier this year was void and could not be renegotiated, they said.

In Berlin, the German chancellor, Angela Merkel, expressed “great regret” at Britain’s decision, but said the EU should not draw “quick and simple conclusions” that might create new and deeper divisions. The union’s foundation was “the idea of peace”, she said.

Speaking in Paris, the French president, François Hollande, said he “profoundly regrets” the Brexit vote but that the EU now had to make changes. In a brief televised statement, Hollande said the vote would put Europe to the test: “To move forward, Europe cannot act as before.”

Schulz said he would speak to Merkel about “how to avoid a chain reaction” of other EU states following Britain.

“The chain reaction being celebrated everywhere now by Eurosceptics won’t happen,” he said, adding that the EU was the world’s biggest single market and “Britain has just cut its ties with that market. That’ll have consequences, and I don’t believe other countries will be encouraged to follow that dangerous path.”

Manfred Weber, the chairman of the European People’s party group of centre-right parties in the European parliament, stressed that Britain had crossed a line and there was no going back.

The vote “causes major damage to both sides”, Weber said. “Exit negotiations should be concluded within two years at max. There cannot be any special treatment. Leave means leave.”

Tusk said earlier that the EU’s 27 remaining members would meet next week to assess their future without Britain, warning that there was “no way of predicting all the political consequences of this event – especially for the UK. It is a historic moment, but not a moment for hysterical reactions.”

Germany’s foreign minister, Frank-Walter Steinmeier, called the result “truly sobering … It looks like a sad day for Europe and the United Kingdom.”

Sigmar Gabriel, the head of Germany’s Social Democrats, Merkel’s coalition partners, said the British vote was a “shrill wake-up call” for European politicians. “Whoever fails to heed it or takes refuge in the usual rituals, will drive Europe against the wall,” Gabriel said.

The Belgian Prime Minister, Charles Michel, called for a special “conclave” of EU leaders as early as next month. “We need to keep a cool head and need to see what new way of cooperation would be possible,” he said.

The Polish foreign minister, Witold Waszczykowski, said in a statement the result showed “disillusionment with European integration, and declining trust in the EU”. He sought to reassure at least 850,000 Poles living in Britain that “during talks (…) we will aim to guarantee the rights citizens have acquired”.

Italy’s Prime Minister, Matteo Renzi, tweeted: “We must change it to make it more human and more just. But Europe is our home, it’s our future.” Lars Loekke Rasmussen, the Danish prime minister, said Denmark “belongs in Europe” but said mounting Euroscepticism must be taken seriously.

In Greece, there was concern that the referendum result would intensify anti-European sentiment. “In the short term, Brexit may help Greece, because our allies will want to solidify and show solidarity,” a senior minister told the Guardian. “But in the long term, it will not. The prospect of Grexit will increase.”

Turkey, whose future membership of the EU played a key role in the UK referendum campaign, cast doubt on the likelihood of it joining in the aftermath of the Brexit vote. “The European Union’s disintegration has started,” deputy Prime Minister Nurettin Canikli tweeted. “Britain was the first to jump ship.”

The UK was the EU’s second-largest economy and largest military power. It will embark on the process of leaving as the union grapples with multiple crises: huge numbers of migrants, economic weakness and a nationalist Russia seeking to overturn the post-cold war order.

Brussels will look to Germany and France to show the world that Europe is still in business. Italy is likely to also play a role in crisis talks, although Spanish elections on Sunday rule out much input from Madrid.

Cameron said in his resignation speech on Friday morning that it would be up to his successor, likely to be appointed within the next three months, to trigger article 50. Once that is done, the clock starts running on two years of negotiations.

The UK has to negotiate two agreements: a divorce treaty to wind down British contributions to the EU budget and settle the status of the 1.2 million Britons living in the EU and 3 million EU citizens in the UK; and an agreement to govern future trade and other ties with its European neighbours.

Tusk has estimated that both agreements could take seven years to settle “without any guarantee of success”. Most Brussels insiders think this sounds optimistic.

Some Brussels insiders fear France and Germany may soften their approach after the vote. Others think countries, especially France, will push for a harsh settlement to hammer home the price of leaving.

One likely outcome of negotiations is that banks and financial firms in the City of London will be stripped of their lucrative EU “passports” that allow them to sell services to the rest of the EU.

However, on paper, nothing changes immediately. The UK remains an EU member until it has finalised the terms of its divorce and is obliged to follow all EU rules.

In theory, the UK retains the decision-making privileges of membership; in reality, power will rapidly drain away and British diplomats can expect to be marginalised in the councils of Brussels.

The UK will keep its veto in some areas, such as tax and foreign policy, but diplomats say Britain’s voice on other EU decisions, for example economy and business, will count for little.



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