Tag Archives: EU

Tackle migration or risk more exits, Hungarian PM tells EU

Hungary's PM Orban arrives on the second day of the EU Summit in Brussels

BUDAPEST (Reuters) – Hungarian Prime Minister Viktor Orban said on Wednesday he would fight to make the European Union adopt a tougher migration policy, without which it would face the risk of more countries leaving.

Orban has blamed the migration crisis for Britain’s vote to leave, a historic decision that has thrown EU politics into turmoil and unleashed a heated debate among member states on how the bloc should move forward.

A persistent critic of Brussels, Orban told a news conference that a big majority of Hungarians supported EU membership and no political parties advocated an EU exit now, not even the radical nationalist Jobbik.

However, he said migration was a watershed issue likely to redefine the nature and extent of European cooperation, adding he would “not relent” in his drive for a tough policy.

“Without clarifying the goals, we cannot talk about more or less Europe,” he said on state TV. “If the discourse of more or less Europe lacks harmony it will lead to distrust.”

“If we are talking about using the EU’s resources to stop them (migrants) and extend control over the process, then Hungary supports more Europe. But if we want to use more Europe to bring them in… then redistribute them, then we support less Europe and want to keep the issue in national control.”

He said that the migration issue was so important that the EU could not afford to impose its will on members without running the risk of more countries following Britain’s lead.

“We must strive to guarantee that Brussels hears the voice of the citizens, that it is possible to achieve in Brussels a migration policy that meets people’s wishes and does not make it unavoidable to risk their membership to step up against a migration policy they dislike,” Orban said on state TV.

“If one day the people think their country can only stop Brussels’ migration policy by exiting the EU, there will be trouble, because the way I understood (Prime Minister) David Cameron’s words that’s what happened in the UK.”

Hungary plans to hold a referendum in September or October on whether it should reject any future mandatory quotas from Brussels to resettle migrants arriving en masse from countries such as Syria.

“Hungarians believe that a clear indication of their will could help create a migration policy in Brussels that is acceptable to us and therefore the issue of membership will not have to be raised,” Orban said.

(Reporting by Marton Dunai and Krisztina Than; Editing by Mark Trevelyan)

‘Why are you here?’ Juncker asks Brexit lawmakers

EC President Juncker welcomes Farage, the leader of the UKIP, prior to a plenary session at the European Parliament on the outcome of the "Brexit" in Brussels

BRUSSELS (Reuters) – European Commission President Jean-Claude Juncker asked lawmakers of Britain’s anti-EU UKIP on Tuesday why they had attended a European Parliament session to discuss the consequences of the British vote to leave the bloc.

“We must respect British democracy and the way it has expressed its view,” Juncker said in a speech to parliament, words that were greeted by rare applause from the UKIP members present.

“That’s the last time you are applauding here… and to some extent I’m really surprised you are here. You are fighting for the exit. The British people voted in favor of the exit. Why are you here?” Juncker continued, breaking from his speech text.

Juncker spoke from a desk next to that of UKIP leader Nigel Farage, who followed the largely French and German speech with headphones and with a British flag planted in front of him.

Before the session began, Farage had gone over to speak to Juncker. Both men appeared relaxed and as Farage made to leave, Juncker pulled him close and gave him an air-kiss on the cheek.

Juncker said he would make no apology for being “sad” at the result of the British vote – “I am not a robot,” he said, “I am not a gray bureaucrat.”

He urged Britain to explain quickly what it wanted from the EU in terms of a new relationship but insisted he had told his staff to engage in no preliminary talks with British officials until London engages the two-year mechanism for leaving the EU.

“No notification, no negotiation,” he said.

On a rare personal note, the 61-year-old former Luxembourg prime minister, struck out at critics, notably in the German press but also among east European governments, who have called on him to stand down following the Brexit vote.

“I am neither tired or sick, as the German papers say,” he said. “I will fight to my last breath for a united Europe.”

(Reporting By Philip Blenkinsop; Editing by Alastair Macdonald)

Brexit vote hits pound and markets, political crisis deepens

Workers walk in the rain at the Canary Wharf business district in London, Britain

By William James and Jamie McGeever

LONDON (Reuters) – Britain’s vote to leave the European Union sent new shockwaves through financial markets on Monday, despite efforts by the country’s leaders to end the deep political and economic uncertainty unleashed by the decision.

Finance minister George Osborne said the British economy was strong enough to cope with the volatility caused by Thursday’s referendum, the biggest blow since World War Two to the European goal of forging greater unity.

But the pound later sank to its lowest level against the U.S. for 31 years and British shares continued the fall that began last week when Britons confounded expectations by voting to end 43 years of EU membership.

Chinese Premier Li Keqiang said uncertainties over the global economy had heightened and called for a “united, stable EU, and a stable, prosperous Britain”.

But with the ruling Conservatives looking for a new leader after Prime Minister David Cameron’s resignation on Friday and lawmakers from the opposition Labour party stepping up a rebellion against their leader, Britain sank deeper into political and economic turmoil.

“There’s no political leadership in the UK right when markets need the reassurance of direction,” said Luke Hickmore of Aberdeen Asset Management, expressing the view of many in the City of London financial center.

Although Cameron is staying on until October as a caretaker, he refused to start formal moves immediately to pull Britain out of the EU. This prompted many European leaders to demand quicker action by Britain, the EU’s second largest economy after Germany before the vote.

“France like Germany says Britain has voted for Brexit. It should be implemented quickly. We cannot remain in an uncertain and indefinite situation,” French finance minister Michel Sapin said on France 2 television.

Guenther Oettinger, a German member of the EU’s executive European Commission, also issued a warning.

“Every day of uncertainty prevents investors from putting their funds into Britain, and also other European markets,” he told Deutschlandfunk radio. “Cameron and his party will cause damage if they wait until October.”

German Chancellor Angela Merkel has taken a softer line, underlining the need to continue a positive trade relationship with Britain, a big market for German carmakers and other manufacturers.

But a Merkel ally, Volker Kauder, made clear the exit negotiations would not be easy.

“There will be no special treatment, there will be no gifts,” Kauder, who leads Merkel’s conservatives in parliament, told ARD television.

FINANCIAL MARKETS’ MISJUDGMENT

Financial markets misjudged the referendum, betting on the status quo despite abundant signs that the vote would be close.

When reality dawned, the reaction was brutal. Sterling fell as much as 11 percent against the dollar on Friday for its worst day in modern history, while $2.8 trillion was wiped off the value of world stocks – the biggest daily loss ever.

That trumped even the Lehman Brothers bankruptcy during the 2008 financial crisis and the Black Monday stock market crash of 1987, according to Standard & Poor’s Dow Jones Indices.

Osborne tried to ease investors’ concerns in his first public comments since the referendum. He said he was working closely with the Bank of England and officials in other leading economies for the sake of stability as Britain reshapes its relationship with the EU.

“Our economy is about as strong as it could be to confront the challenge our country now faces,” he told reporters at the Treasury. “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.”

Boris Johnson, a leading proponent of a Brexit and likely contender to replace Prime Minister David Cameron who resigned on Friday, praised Osborne for saying “some reassuring things to the markets.”

The former London mayor said outside his home in north London that it was now clear “people’s pensions are safe, the pound is stable, markets are stable. I think that is all very good news.”

But financial markets took a different view, with sterling sliding Monday, shedding more than 3 percent against the dollar to $1.3221

The yield on British 10-year government bonds fell below one percent for the first time due to investors betting that the Brexit vote would trigger a Bank of England interest rate cut aimed at steading the economy.

Many economists have cut economic growth forecasts for Britain, with Goldman Sachs expecting a mild recession within a year.

But the risks affect economies far beyond Britain.

“Against the backdrop of globalization, it’s impossible for each country to talk about its own development discarding the world economic environment,” China’s Li told the World Economic Forum in the city of Tianjin.

Japanese Prime Minister Shinzo Abe instructed his finance minister to watch currency markets “ever more closely” and take steps if necessary.

At the weekend, the policy chief of Abe’s LDP party held open the possibility of currency intervention to weaken the yen and temper “speculative, violent moves”.

DIVIDED PARTIES

The referendum has revealed social as well as economic stresses in divided Britain. Immigration emerged as one of the main themes of the referendum campaign, with those who backed a British exit saying the EU had allowed uncontrolled numbers of migrants to arrive from eastern Europe.

Police said offensive leaflets targeting Poles had been distributed in Huntingdon, central England, and graffiti had been daubed on a Polish cultural center in central London on Sunday, three days after the vote.

According to a local newspaper, the Cambridge News, the leaflets said: “Leave the EU/No more Polish vermin” in English and Polish.

The Polish embassy in London said it was shocked by the “recent incidents of xenophobic abuse directed against the Polish community and other UK residents of migrant heritage.”

With Britain now facing uncertainty over how its trade relationship with the EU will unfold, Johnson tried to calm fears by writing in the Daily Telegraph newspaper that there would be continued free trade and access to the single market.

He did not set out any details but suggested Britain would not accept free movement of workers, saying it could implement an immigration policy which suited business and industry.

However, single market rules stipulate that countries must accept the free movement of people as well as goods. Yielding on immigration would anger many Britons who voted to leave, believing this would halt a tide of workers from eastern Europe.

Johnson is expected to declare soon that he is running to lead the Conservatives, who have been divided for decades between pro- and anti-EU factions.

Divisions within the opposition are also deep. A wave of Labour lawmakers resigned from leader Jeremy Corbyn’s team on Monday, adding to the 11 senior figures who quit on Sunday.

They say Corbyn, a veteran left-winger who has strong support among ordinary party members, is not fit to lead the party and point to his low-key campaign to keep Britain in the EU.

If repeated at the next parliamentary election, due in 2020, they fear Labour faces disaster following its near wiping out in Scotland last year. Corbyn has said he is going nowhere.

(Additional reporting by Kevin Yao, Costas Pitas, Bate Felix, Andrea Shalal, Michael Holden, Guy Faulconbridge, David Milliken, Patrick Graham, Anirban Nag, Conor Humphries, Minami Funakoshi and Tetsushi Kajimoto, Writing by David Stamp, Editing by Timothy Heritage)

Obama says UK relationship endures despite Brexit

President Obama delivers statement about Britain leaving EU

WASHINGTON (Reuters) – President Barack Obama said on Friday that strong U.S. ties to Britain and the European Union would endure after British voters chose to leave the EU in a referendum that sent U.S. officials scrambling to contain political and economic fallout.

“The people of the United Kingdom have spoken, and we respect their decision,” said Obama, who had argued passionately for close NATO ally Britain to stay in the group.

“The United Kingdom and the European Union will remain indispensable partners of the United States even as they begin negotiating their ongoing relationship,” Obama said in a statement.

Britain’s decision at a referendum on Thursday forced the resignation of Prime Minister David Cameron and dealt the biggest blow to the European project of greater unity since World War Two.

The vote threatened to damage the U.S. economic recovery, hurt Obama’s trade agenda and made it more difficult for America’s Western allies to face challenges such as Islamic State, the rise of China and climate change together in the Democratic president’s last months in the White House.

Obama administration officials are also casting a wary eye across the Atlantic at the success of Britain’s “Leave” campaign, which has similarities with Republican Donald Trump’s insurgent bid for the Nov. 8 presidential election.

Obama, during a visit to London in April, had warned against Brexit, or Britain’s exit from the EU, in an unusually strong intervention into British politics.

“I must say we had looked for a different outcome. We would have preferred a different outcome,” U.S. Vice President Joe Biden, traveling in Ireland, said on Friday.

Biden, in remarks prepared for a speech at Dublin Castle, took a swipe at Trump who won the Republican nomination by highlighting some of the issues, particularly immigration, that appear to have won support for Britain’s “Leave” campaign.

Without mentioning Trump by name, Biden warned against “politicians and demagogues peddling xenophobia, nationalism, and isolationism.”

TRUMP ON BREXIT

Trump thrust himself into the heart of the Brexit issue, calling the result of the vote a “great thing” and drawing parallels to his own unorthodox presidential campaign.

“People want to take their country back. They want to have independence in a sense. You see it with Europe, all over Europe,” Trump, 70, said in Turnberry, Scotland where he reopened a golf course.

Obama hopes his former secretary of state Hillary Clinton will win the November election and safeguard his legacy but economic volatility in the United States after Brexit could hurt her chances of beating Trump.

In response to Britain’s decision to leave, Clinton said the United States must first safeguard against any economic fallout at home at “this time of uncertainty” and underscore its commitment to both Britain and Europe.

With the Brexit result rattling Wall Street and other markets around the world, the U.S. Federal Reserve sought to calm global financial markets by saying it was ready to provide dollar liquidity following the British vote.

After Brexit, the U.S. central bank’s ambitions for two interest rate rises this year now look unlikely. Traders of U.S.-interest rate futures even began to price in a small chance of a Fed rate cut, and now see little chance of any hike until the end of next year.

“One can forget about rate hikes in the near term,” said Thomas Costerg, New York-based economist at Standard Chartered Bank. “What I’m worried about is that the Brexit vote could be the straw that breaks the back of the U.S. growth picture.”

The historic divorce launched by the Brexit vote could sink hopes of a massive U.S.-EU free trade deal before Obama leaves office in January.

Negotiations on the Transatlantic Trade and Investment Partnership, or TTIP, were already stalled by deeply entrenched differences and growing anti-trade sentiment on both continents.

(Additional reporting by Doina Chiacu and Ayesha Rascoe in Washington, Steve Holland in Scotland and Ann Saphir in San Francisco; Writing by Susan Heavey and Alistair Bell; Editing by Chizu Nomiyama)

‘Explosive shock’ as Britain votes to leave EU, Cameron quits

Celebrating Britain leaving the EU

By Guy Faulconbridge and Kate Holton

LONDON (Reuters) – Britain voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow to the European project of greater unity since World War Two.

Global financial markets plunged on Friday as results from a referendum showed a 52-48 percent victory for the campaign to leave a bloc Britain joined more than 40 years ago.

The pound fell as much as 10 percent against the dollar to touch levels last seen in 1985, on fears the decision could hit investment in the world’s fifth-largest economy, threaten London’s role as a global financial capital and usher in months of political uncertainty.

World stocks headed for one of the biggest slumps on record, and billions of dollars were wiped off the value of European companies. Britain’s big banks took a $130 billion battering, with Lloyds <LLOY.L> and Barclays <BARC.L> falling as much as 30 percent at the opening of trade.

The United Kingdom itself could now break apart, with the leader of Scotland – where nearly two-thirds of voters wanted to stay in the EU – saying a new referendum on independence from the rest of Britain was “highly likely”.

An emotional Cameron, who led the “Remain” campaign to defeat, losing the gamble he took when he called the referendum three years ago, said he would leave office by October.

“The British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction,” he said in a televised address outside his residence.

“I do not think it would be right for me to be the captain that steers our country to its next destination,” he added, choking back tears before walking back through 10 Downing Street’s black door with his arm around his wife Samantha.

Quitting the EU could cost Britain access to the EU’s trade barrier-free single market and means it must seek new trade accords with countries around the world.

The EU for its part will be economically and politically damaged, facing the departure of a member with its biggest financial center, a U.N. Security Council veto, a powerful army and nuclear weapons. In one go, the bloc will lose around a sixth of its economic output.

“It’s an explosive shock. At stake is the break up pure and simple of the union,” French Prime Minister Manuel Valls said. “Now is the time to invent another Europe.”

The result emboldened eurosceptics in other member states, with French National Front leader Marine Le Pen and Dutch far-right leader Geert Wilders demanding their countries also hold referendums. Le Pen changed her Twitter profile picture to a Union Jack and declared “Victory for freedom!”

The vote will initiate at least two years of divorce proceedings with the EU, the first exit by any member state. Cameron – who has been premier for six years and called the referendum in a bid to head off pressure from domestic eurosceptics – said it would be up to his successor to formally start the exit process.

His Conservative Party rival Boris Johnson, the former London mayor who became the most recognizable face of the “Leave” camp, is now widely tipped to seek his job.

Johnson left his home to jeers from a crowd in the mainly pro-EU capital. He spoke to reporters at Leave campaign headquarters, taking no questions on his personal ambitions.

“We can find our voice in the world again, a voice that is commensurate with the fifth-biggest economy on Earth,” he said.

‘INDEPENDENCE DAY’

There was euphoria among Britain’s eurosceptic forces, claiming a victory over the political establishment, big business and foreign leaders including U.S. President Barack Obama who had urged Britain to stay in.

“Let June 23 go down in our history as our independence day,” said Nigel Farage, leader of the eurosceptic UK Independence Party, describing the EU as “doomed” and “dying”.

On the continent, politicians reacted with dismay.

“It looks like a sad day for Europe and Britain,” said German foreign minister Frank-Walter Steinmeier. His boss Angela Merkel invited the French and Italian leaders to Berlin to discuss future steps.

The shock hits a European bloc already reeling from a euro zone debt crisis, unprecedented mass migration and confrontation with Russia over Ukraine. Anti-immigrant and anti-EU political parties have been surging across the continent, loosening the grip of the center-left and center-right establishment that has governed Europe for generations.

U.S. presidential candidate Donald Trump, whose own rise has been fueled by similar disenchantment with the political establishment, called the vote a “great thing”. Britons “took back control of their country”, he said in Scotland where he was opening a golf resort. He criticized Obama for telling Britons how to vote, and drew a comparison with his own campaign.

“I see a big parallel,” he said. “People want to take their country back.”

American Vice President Joe Biden said the United States would have preferred Britain to remain in the EU, but respected the decision.

Britain has always been ambivalent about its relations with the rest of post-war Europe. A firm supporter of free trade, tearing down internal economic barriers and expanding the EU to take in ex-communist eastern states, it opted out of joining the euro single currency or the Schengen border-free zone.

Cameron’s ruling Conservatives in particular have harbored a vocal anti-EU wing for generations, and it was partly to silence such figures that he called the referendum in 2013.

When he called the referendum, he thought it would be a sure thing. But the 11th hour decision of Johnson – a schoolmate from the same elite private boarding school – to come down on the side of Leave gave the exit campaign a credible voice.

Even until the last minute, bookmakers and financial markets had overwhelmingly predicted a Remain vote.

World leaders including Obama, Chinese President Xi Jinping, German Chancellor Angela Merkel, NATO and Commonwealth governments had all urged a “Remain” vote, saying Britain would be stronger and more influential in the EU than outside.

The four-month campaign was among the divisive ever waged in Britain, with accusations of lying and scare-mongering on both sides and rows over immigration which critics said at times unleashed overt racism.

It revealed deep splits in British society, with the pro-Brexit side drawing support from millions of voters who felt left behind by globalization and blamed EU immigration for low wages and stretched public services.

At the darkest hour, a pro-EU member of parliament was stabbed and shot to death in the street. The suspect later told a court his name was “Death to traitors, freedom for Britain”.

Older voters backed Brexit; the young mainly wanted to stay in. London and Scotland supported the EU, but wide swathes of middle England, which have not shared in the capital’s prosperity, voted to leave.

THREAT OF UK BREAK-UP

The United Kingdom itself now faces a threat to its survival. Scottish First Minister Nicola Sturgeon said it was “democratically unacceptable” for Scotland to be dragged out of the EU against its will.

“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,” she told reporters, two years after Scots voted to stay in the United Kingdom. “I think an independence referendum is now highly likely.”

The global financial turmoil was the worst shock since the 2008 economic crisis, and comes at a time when interest rates around the world are already at or near zero, leaving policymakers without the usual tools to respond.

The body blow to global confidence could prevent the Federal Reserve from raising interest rates as planned this year, and might even provoke a new round of emergency policy easing from all major central banks, despite their limited options.

The Bank of England pledged a huge financial backstop to calm plunging markets. Governor Mark Carney said it was offering to provide more than 250 billion pounds ($347 billion) plus “substantial” foreign currency liquidity and it was ready to take additional measures if needed.

Other central banks around the globe also intervened in markets. The European Central Bank said it was ready to provide euro and foreign currency liquidity if necessary.

Left unclear is the relationship Britain can negotiate with the EU once it leaves.

To retain access to the single market, vital for its giant financial services sector, London may have to adopt all EU regulation without having a say in its shaping, contribute to Brussels coffers, and continue to allow free movement as Norway and Switzerland do – all things the Leave campaign vowed to end.

EU officials have said UK-based banks and financial firms would lose automatic access to sell services across Europe if Britain ceased to apply the EU principles of free movement of goods, capital, services and people.

Huge questions also face the millions of British expatriates who live freely elsewhere in the bloc and enjoy equal access to health and other benefits, as well as millions of EU citizens who live and work in Britain.

(Additional reporting by William James, Kylie MacLellan, Sarah Young, Alistair Smout, Costas Pitas, Andy Bruce and David Milliken; Writing by Mark John and Pravin Char; Editing by Peter Graff)

EU allows Iran’s state carrier to resume flights in bloc

Lion Air airplane

By Julia Fioretti

BRUSSELS (Reuters) – Iran’s state airline, which has just reached an agreement with Boeing Co to purchase new jetliners, can resume flights in the EU, the European Commission said on Thursday.

Iran is dangling the prospect of significant business for Western planemakers as it emerges from decades of sanctions.

While the European Commission, the EU’s executive, said Iranair could resume flights, some of the carrier’s aircraft would remain on the EU’s safety blacklist.

“I am happy to announce that we are now also able to allow most aircraft from Iranair back into European skies,” said EU Transport Commissioner Violeta Bulc. The Commission said the decision followed a visit to Iran by the EU executive in April.

The Commission also removed Indonesian budget carrier Lion Air, a major buyer of Airbus and Boeing jets, from its safety blacklist.

Iranair will be allowed to fly all of its planes in the EU except the Boeing 747-200s, Boeing 747SPs and Fokker 100s, the Commission said.

Iran needs an estimated 400 jets to renew its fleet and prepare for projected growth, according to Iranian and Western estimates.

Tehran said on Tuesday that it had reached an agreement with Boeing for the supply of jetliners, reopening the country’s skies to new U.S. aircraft for the first time in decades.

The Iranian flag carrier also agreed in January to buy 118 jets worth $27 billion from Airbus and is discussing further orders with Airbus.

The decision to remove Lion Air from the EU blacklist could also potentially lead to the Indonesian carrier buying more planes, analysts have said.

Lion’s five airlines operate a combined fleet of more than 200 aircraft, mostly Airbus A320s and Boeing 737s. The company, which plans a stock exchange listing possibly early next year, has around 500 more aircraft on order, and expects to take delivery of 40 aircraft this year.

The EU executive also removed Indonesia’s Citilink, Batik Air, Air Madagascar and all Zambian airlines from its blacklist.

(Reporting by Julia Fioretti; Editing by Susan Fenton)

London traders brace for biggest night since Black Wednesday

The Canary Wharf financial district is seen at dusk in east London, Britain

By William James, Freya Berry and Patrick Graham

LONDON (Reuters) – The world’s biggest banks including Citi and Goldman Sachs will draft in senior traders to work through the night following Britain’s referendum on EU membership, set to be among the most volatile 24 hours for markets in a quarter of a century.

A vote to leave the European Union on June 23 would spook investors by undermining post-World War Two attempts at European integration and placing a question mark over the future of the United Kingdom and its $2.9 trillion economy.

Citi, Deutsche Bank, JPMorgan, Goldman Sachs, HSBC, Barclays, Royal Bank of Scotland and Lloyds are among those banks planning to have senior staff and traders working or on call in London as results start to dribble in after polls close at 2100 GMT, according to the sources.

Jamie Dimon, chief executive officer of JPMorgan Chase &amp; Co, told employees on a visit to Britain this month that if the vote was to leave the EU, the bank would have to have “teams of people thrown on what that means”.

“We won’t know what it means: there is a wide range of outcomes,” Dimon, a supporter of Britain’s membership who has warned of job cuts at JPMorgan in Britain if there is an Out vote, said in the broadcast speech.

A vote to leave could unleash turmoil on foreign exchange, equity and bond markets, spoiling bets across asset classes and potentially testing the infrastructure of Western markets such as computer systems, stock exchanges and clearing houses.

Federal Reserve Chair Janet Yellen has cautioned that a Brexit vote could shake financial markets and potentially push back the timing of the next rise in U.S. interest rates.

Bank of England Governor Mark Carney has said sterling could depreciate, “perhaps sharply” and some major banks have forecast an unprecedented fall to parity with the euro and as low as $1.20 in the days following any vote to leave the bloc.

The Bank of England will be staffed overnight, with senior policymakers on call if markets go into meltdown. The finance ministry would not comment on its staffing plans.

The official Vote Leave campaign argues there is no evidence that leaving the EU would weaken sterling long term, while Nigel Farage, leader of the UK Independence Party has said that even if the currency did fall, it would simply boost British exports.

BREXIT NIGHT?

Sterling – the world’s fourth most traded currency – has moved sharply in recent weeks, often on the back of opinion polls.

Depending on the results from across the United Kingdom, the night of June 23 and early morning of June 24 could rank as one of the most volatile nights in the history of the London market.

“We’ve all seen U.S. elections, UK general elections, we’ve had the Scottish referendum, the collapse of Lehman and QE (Quantitative Easing) but this is by far and away the biggest risk event that has presented itself to the UK,” said Chris Huddleston, head of money markets at specialist bank Investec.

London accounts for 41 percent of global turnover in the $5.3 trillion-a-day foreign exchange market, more than double the turnover in the United States and far more than the 3 percent of its closest EU competitors, France and Switzerland.

“All the traders are going to be in … They don’t like missing big moments, if there’s going to be one, they want to be at their desk,” said a senior source at a major bank based in the Canary Wharf financial district of London.

Some banks are planning the night down to the smallest detail to keep their traders on top form – laying on all night catering and booking nearby hotels to offer temporary respite.

“It is the biggest planned risk event that anyone can remember, so everyone is going to be involved. The question is just when you try and get some sleep,” said one senior foreign exchange trader.

No exit polls are planned by British broadcasters so the first numbers from the counts will be turnout results from 382 different areas followed by totals for ‘Remain’ and ‘Leave’ in each area. [L8N1920W5]

STERLING

Polls have given contradictory pictures of British public opinion, keeping markets guessing on the final outcome.

That has left sterling, currently priced at $1.41, far away from either of its likely resting places after the final result is known – seen by banks as around $1.50 in the event of a remain vote, or $1.30 or lower if Britain votes to leave.

That almost-certain rapid repricing could set the scene for one of the rockiest sessions since traders wrestled down the value of sterling on Black Wednesday, September 16, 1992, when Britain crashed out of the European Exchange Rate Mechanism.

“If it’s Brexit, then we’re looking at something that’s at least on the scale of Black Wednesday,” said Nick Parsons, global co-head of FX strategy at National Australia Bank and a veteran of the 1992 sterling crisis.

Prices for derivatives used to mitigate the risk of sharp swings in sterling point to a period of intense volatility.

Officials and bank managers planning for the event draw comparisons with the 40 percent surge in the Swiss franc in January 2015, which bankrupted dozens of small investment funds and cost banks including Citi hundreds of millions of dollars.

Traders and analysts told Reuters they would expect a Brexit vote to cause sterling to ‘gap’, or plummet lower – as orders to sell the currency met an absence of willing buyers, leaving a blank spot on the price charts snaking across traders’ screens.

Gaps can inflict huge losses on banks and traders, forcing them to bail out of trades at prices far below the automatic sell orders, or ‘stops’ they normally use to limit losses.

Currency market participants have urged the Bank of England to call on U.S. Federal Reserve if the turbulence gets really bad. The BoE could buy sterling with dollars borrowed directly from the U.S. central bank under arrangements first used in response to the global financial crisis in 2008.

Carney has said the Bank would not stand in the way of any exchange rate adjustment but would take the necessary steps to ensure markets remained orderly. It has not commented on whether or how the bank might intervene.

“MONEY TO BE MADE”

A senior source at one London bank said his firm had been building big reserves of sterling to lend out to any clients who get caught short by swirling asset valuations that require them to post extra security deposits with their trading partners.

Foreign exchange brokers such as PhillipCapital UK and Saxo Bank have raised the security deposit they demand from clients in order to trade, a step designed to offset the increased risk that customers get caught out by sharp moves.

One asset manager who declined to be named said his firm had run a test to see if it could cope with a 30 percent fall in sterling. The fund had increased its cash holdings and would have traders working overnight, ready to sell other assets in case it needed to raise more cash in a hurry.

Volatile markets not only put traders under pressure: they test the limits of the technology that underpin the market.

A source at the London Stock Exchange said volatility could spike on June 24 and that it was putting in emergency capacity for transaction reporting to cope with any spike in trading volumes that might otherwise overwhelm its systems.

A spokesperson for LSE declined to comment.

Despite facing a battle against surges in trading volumes, volatile prices and, at times, the absence of enough buyers or sellers to meet demand, some traders are rubbing their hands at the prospect of a night and day of high drama.

“You look forward to days like this,” said one bond trader at a major London bank. “There’s money to be made and lost … You’ve just got to hope you’re on the right side of it, not the one being carried out the door.”

(Additional reporting by Jamie McGeever, Anirban Nag, John Geddie, Dhara Ranasinghe, William Schomberg, Anjuli Davies, Andrew Macaskill, Lawrence White, Simon Jessop, Marc Jones and Maiya Keidan, Editing by Guy Faulconbridge and Philippa Fletcher)

Serbia must improve disabled children’s care to join EU

Serbia must improve disabled children's care to join EU

BELGRADE (Reuters) – Serbia shuts disabled children away in institutions with substandard care and the European Union must make better treatment for them a prerequisite for joining its ranks, Human Rights Watch said on Wednesday.

A report by the rights watchdog said Serbia, which has begun negotiations to join the EU, has ratified United Nations conventions on the rights of children and of people with disabilities as well as against all forms of torture.

But its investigators found that parents of children born with disabilities were pressured to put them into state-run institutions where they were mostly neglected, got little schooling and were cut off from their families.

Serbia should aim to return children to their families if possible and support their inclusion in family and community life, where research has shown their mental and emotional development progresses much better, the report said.

“The European Commission, as part of monitoring compliance with the EU accession requirements, should hold Serbia to its obligations to respect the human rights of persons with disabilities as a precondition for EU membership,” it said.

EU talks with Belgrade should stress “the absolute prohibition of neglect and discrimination against children with disabilities,” it added.

Serbia’s public health system is run down and has been short of funds since the former Yugoslavia’s wars began in the early 1990s. In this traditional Balkan society, disabled children are often not understood and rejected by their own families.

The disabled make up about 80 percent of the children in the often understaffed care-giving centers, the report said, and 60 percent of the children in institutions do not attend school.

The report, citing studies of children returned to their families, urged Serbia to stop building these care-giving centers and establish a system of services for the children and their families to help integrate them into society.

“Children who were moved from an institution into family-based environment demonstrated signs of improvement in their intellectual functioning, attachment patterns, reduced signs of emotional withdrawal, and reduced prevalence of mental health conditions,” it said.

The report recommended that EU member states make sure that respect for the U.N.’s Convention on the Rights of Persons with Disabilities is “part of the accession requirements”.

It called on international financial organizations including the World Bank to help with funding to organize “support services for families of children with disabilities and prevention of institutionalization of children”.

Serbia opened accession negotiations with Brussels last December and hopes to wrap up the talks by 2019.

(Reporting by Ivana Sekularac; Editing by Tom Heneghan)

Europe steps up North Korea sanctions with oil, finance bans

North Korean leader Kim Jong Un speaks during a ceremony at the meeting hall of the Central Committee of the Workers' Party of Korea

By Robin Emmott

BRUSSELS (Reuters) – The European Union stepped up its sanctions on North Korea on Friday with near-blanket trade and travel bans after Pyongyang’s latest nuclear test and rocket launch, a move going beyond new U.N. Security Council sanctions.

Pyongyang is also banned from selling any oil-related or luxury goods to the European Union, while EU nations cannot invest in the country’s mining, refining and chemical industries.

“Considering that the actions of (North Korea) constitute a grave threat to international peace and security in the region and beyond, the EU decided to further expand its restrictive measures,” the Council said.

North Korea’s latest nuclear test was on Jan. 6. On Feb. 7, it launched a rocket that the United States said used banned ballistic missile technology. Pyongyang said it was a peaceful satellite launch.

The EU measures, which diplomats say are designed to show solidarity with major EU trade partners South Korea and Japan, come on top of asset freezes and travel bans for another 16 North Koreans agreed earlier this year. That puts 66 people and 42 companies under the EU sanctions regime.

EU foreign ministers have reinforced their sanctions several times in recent years to include asset freezes and bans on financing and the delivery of banknotes.

EU countries cannot export arms or metals used in ballistic missile systems and are banned from selling gold, diamonds and luxury goods to North Korea. Joint ventures are outlawed.

However, the impact of the new measures is likely to be limited as trade between the European Union and North Korea fell to just 34 million euros in 2014 from more than 300 million euros a decade ago.

Germany and Sweden are also reluctant to totally isolate North Korea. They have maintained diplomatic ties in Pyongyang since the 1970s, providing humanitarian aid to North Koreans.

(Reporting by Robin Emmott; Editing by Tom Heneghan)

Gene Editing in cattle, pigs, super crops; poses new EU dilemma

Professor Wendy Harwood poses for a photograph in a plant breeding incubator room with barley plants that have undergone gene editing at the John Innes Centre in Norwich

By Ben Hirschler

LONDON (Reuters) – Heat-tolerant Angus beef cattle designed for the tropics with white coats instead of black or red. A button mushroom that doesn’t turn brown. Pigs that don’t fall sick.

These are all ideas thrown up by gene editing, the new technology taking the biomedical world by storm, and one which also promises a revolution down on the farm.

It poses a thorny problem for European policymakers wary of new molecular manipulation in agriculture after a quarter century of conflict over genetically modified food.

In a research lab in Norwich, 100 miles northeast of London, Wendy Harwood is making exact DNA tweaks in barley plants to produce better-germinating grain, with higher yield and quality.

“We’ve never been able to go in and make such a precise change as we can now with gene editing,” said the John Innes Centre scientist. “This gives you exactly the change you want without anything you don’t want.”

Further to the south of England in Basingstoke, animal genetics firm Genus has tapped the same “CRISPR-Cas9” technique to develop the world’s first pigs resistant to a devastating and common viral disease, in a tie-up with U.S. researchers.

Agricultural scientists and companies worldwide are joining the gene editing race, including seeds giant Monsanto, now the target of a $62 billion takeover attempt by Germany’s Bayer.

Rival DuPont, which is merging with Dow Chemical, hopes to have CRISPR-edited corn and wheat on the market in five to 10 years.

Bright ideas from others include improved varieties of rice, soybeans and tomatoes, as well as hornless cattle and the heat-tolerant breed of Angus.

Using “molecular scissors” to cut DNA means scientists can edit genomes more precisely and rapidly than ever before, and agricultural products – which don’t need the same clinical trials as human drugs – could get to market relatively quickly.

U.S. GREEN LIGHT

Last month, a non-browning button mushroom became the first CRISPR-edited organism to get a green light from the U.S. government – and several crops developed with two older, less efficient editing tools have already been waved through.

But whether such products will ever arrive on European farms is another matter, since the European Commission has so far not made a decision on how they will be regulated, leaving the new science in limbo.

The EU executive had been due to decide by the end of 2015 whether to class gene-edited products as genetically modified organisms (GMOs), subjecting them to the same stringent restrictions that have curbed GMO use in Europe.

This deadline was missed, as was a second one of end-March 2016, and there is now no new timeline for a decision.

Both sides in the debate are worried.

Greenpeace wants the EU’s GMO law to be fully applied to “new breeding techniques” (NBT) like gene editing, because of potential environmental and health impacts, and it fears Brussels is dithering under pressure from Washington.

“We are concerned that we would get products that are risky but could arrive on the market without any risk assessment or labeling or detection methods,” said spokeswoman Franziska Achterberg.

She believes the EU has delayed regulation to pave the way for a transatlantic trade deal, citing a document in which a U.S. official warned that “different regulatory approaches between governments to NBT classification would lead to potentially significant trade disruptions”.

A Commission spokesman denied the delays had anything to do with the Transatlantic Trade and Investment Partnership trade pact talks, but could not say when the EU would make a ruling.

Biotechnology companies, meanwhile, argue their gene-edited products are “non-GMO”, since they do not contain foreign DNA from a different species.

“We fundamentally see gene editing as being very distinct from GMO,” said Genus Chief Executive Karim Bitar. “It’s a very precise cut and there is no movement of genes from one species to another. That’s a major attraction.”

FIND-AND-REPLACE FUNCTION

The argument is complex.

Unlike traditional GMOs, in which a gene is added from another organism, gene-editing works like the find-and-replace function on a word processor. It finds a gene and then makes changes by amending or deleting it.

Proponents argue this makes it similar to conventional selective breeding, which is freely allowed in the EU, since such mutations within the same species can – and do – also occur naturally.

Rene Smulders, a plant breeder at Wageningen University in the Netherlands, says the current uncertainty is affecting research. His group had a grant application turned down last year because of concerns about the legal situation.

He wants Europe to follow the lead of Canada, which decides on new products based on their traits, not how those traits were produced. “Europe’s process-based legislation creates problems and is not suitable for the future,” Smulders said.

Cellectis CEO Andre Choulika, whose Calyxt unit has used older forms of gene editing to improve potatoes, wheat and soybeans, thinks the odds are 50:50 that gene-editing will end up being classified as GMO in Europe.

“If Europe does that, I think they will probably send themselves into the stone age of agricultural biotechnology,” he said.

(Additional reporting by Barbara Lewis in Brussels; Editing by Pravin Char)