Business Economy 24 Jul 2016 UK comes under press ...

UK comes under pressure to spell out Brexit plans at G20

Published Jul 24, 2016, 10:17 am IST
Updated Jul 24, 2016, 10:38 am IST
Britain's Chancellor of the Exchequer Philip Hammond (C)
 Britain's Chancellor of the Exchequer Philip Hammond (C)

Britain's Chancellor of the Exchequer Philip Hammond (C) walks to a meeting during the G20 Finance Ministers and Central Bank Governors conference held in Chengdu in South western China's Sichuan province, July 23, 2016.

Britain faced calls on Saturday from some European and Asian countries to move more quickly towards leaving the European Union, but the United States said the process was too sensitive to be rushed.

At the first meeting of leading economies since British voters shocked global markets in June by deciding to quit the EU, finance ministers and central bankers said Brexit had the potential to weigh on the world's already slow economic growth.

In a draft statement, the Group of 20 nations said the referendum result added to uncertainty in the world economy and they hoped ‘to see the UK as a close partner of the EU.’

British Prime Minister Theresa May, who has been in the job less than two weeks, has left many countries guessing what her negotiating position will be after she said she would not trigger the formal start of EU exit talks during 2016. Ministers from France and Italy said they wanted more clarity now on how quickly Britain would start the process of ending its 43-year membership of the bloc.

‘We have to have certainty now around the timetable," French Finance Minister Michel Sapin said. "We say that not to put undue pressure on the British authorities but because I believe that is what everyone - all observers and the markets - need.’

‘I hope that there is going to be clarification about the timing and process of the divorce," Italy's Economy Minister Pier Carlo Padoan said. "The sooner the better so this generates a new equilibrium.’

Britain's new finance minister Philip Hammond was attending the G20 meeting in the southwestern Chinese city of Chengdu but did not comment to media.

The International Monetary Fund said last week that it had been planning to raise its forecasts for global growth until Brexit threw ‘a spanner in the works,’ prompting it to trim its forecasts instead. It said the outlook could prove to be a lot worse if Britain failed to strike a friendly deal with the EU. Britain itself may be facing a recession. A business survey published on Friday suggested its economy was shrinking as a result of the referendum.

An official from an Asian G20 country said foreign investors in Britain needed to get a sense of how much access the country might lose to the EU's single market if it drops the bloc's core principle of open borders for EU workers.

‘If it doesn't act quickly, negative effects on corporate investment would be prolonged,’ the Asian official said. ‘We want UK-EU negotiations to settle quickly in a way that won't affect business strategies in our country.’

But the United States called for patience, saying it was more important to get the tone of the Brexit talks right than to have a timetable.

‘My own view is that there is undue weight being given to a calendar which is going to take a while to resolve, regardless of when you actually begin the Article 50,’ a senior U.S. Treasury official said, referring to part of the bloc's treaty on the two-year process for a country to end its membership.

'The thing that would be very disruptive is a highly confrontational process.'



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