Brexit Fall-Out: Week Ahead in the European Union June 27- July 2

By Natalia Drozdiak

News in the week ahead will largely be dominated by the fall-out from Britain’s decision to leave the European Union. We’ll be watching for developments in the U.K. political scene, more reaction from the rest of the bloc’s member states and from central bankers trying to keep financial markets under control. EU officials will also meet with Turkey later in the week to open another area of negotiations in the country’s EU accession bid, which Ankara says is a crucial process to uphold the migration deal.

1) The U.K.’s political and domestic landscape will be in focus after Prime Minister David Cameron, a Conservative, said he would remain in his position for the next three months, with the aim of having a new leader in place by October to deal with the EU exit negotiations. Surveys show former London Mayor Boris Johnson and Justice Minister Michael Gove are the favorites to succeed him after successfully campaigning to leave. But the opposition’s leadership is also facing questions about their future. Labour leader Jeremy Corbyn has faced accusations from other lawmakers in his party he didn’t do enough rally support in favor of the Remain campaign. Meanwhile, Scottish first minister Nicola Sturgeon said the Scottish government will begin preparing legislation to hold a second referendum on independence from the U.K.

2) The EU heads of government gather Tuesday and Wednesday in Brussels, where ‘Brexit’ will be high on the agenda. The leaders will discuss the timeline for the negotiations for U.K.’s departure. Som e European governments on Friday urged Britain to officially notify its intention to leave as soon as possible, which would kick-start the discussions to work out various issues, from single-market access for U.K. companies to Britain’s sharing of EU security databases in the fight against terrorism. The leaders will meet on Wednesday without the U.K. to discuss the future of the bloc with its smaller club of members. The governments will also discuss EU-NATO cooperation ahead of the NATO summit in Warsaw in early July.

3) The markets will also be in focus after the pound plummeted and stocks around the world took a beating Friday. Keep an eye on central-bank activity if the markets don’t recover. Both the European Central Bank and the Bank of England both said Friday they stood ready to provide cash to banks and employ other tools to ensure the stability of the financial system.

4) Spain will head back to the polls on Sunday following previous unsuccessful attempts to form a government this spring, in a context where small parties won nearly 40% of the parliament seats in December due to voter anger over high unemployment and corruption scandals. The Spanish election comes at a time when EU leaders fear the U.K.’s decision will inspire other member states to hold referendums of their own on the question of leaving the bloc. Geert Wilders, the leader of the anti-immigrant, anti-Europe Dutch Freedom Party, welcomed the U.K. result Friday morning, saying on Twitter that “the Netherlands will be next!”

5) On Thursday, the EU institutions will switch tack and meet with Turkish officials to open another area of negotiations in Turkey’s EU accession bid. There are around 35 areas of negotiation but many of them are blocked. Turkish officials have criticized the slow pace of the negotiations, adding that the negotiations were crucial for the EU-Turkey migration deal.

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