The Referen-Doom: EU, Merkel, ECB All Scramble To Calm Panic

In the aftermath of the Brexit vote, the entire concept of a European Union suddenly finds itself existentially threatened, with demands for referenda issued overnight by the Netherlands, France, Italy and moments ago Scotland. This is why all the highest European institutions have been unleashed in an attempt to quell a panic that the EU has never felt, not even during the depths of the recurring Greek insolvency crisis (as we noted last night, it would be ironic if Greece ends up the last country in a European "Union" as all of its peers depart).

Below is the joint statement released moments ago by Europe's top unelected oligarchs, the ones that the people of UK declared independence day against, including Donald Tusk, President of the European Council, Martin Schulz, President of the European Parliament, Mark Rutte, holder of the rotating Presidency of the Council of the EU, and Jean-Claude Juncker, President of the European Commission, on the outcome of the United Kingdom referendum.

President Tusk, President Schulz and Prime Minister Rutte met this morning in Brussels upon the invitation of European Commission President Juncker. They discussed the outcome of the United Kingdom referendum and made the following joint statement:

 

"In a free and democratic process, the British people have expressed their wish to leave the European Union. We regret this decision but respect it.

 

This is an unprecedented situation but we are united in our response. We will stand strong and uphold the EU's core values of promoting peace and the well-being of its peoples. The Union of 27 Member States will continue. The Union is the framework of our common political future. We are bound together by history, geography and common interests and will develop our cooperation on this basis. Together we will address our common challenge to generate growth, increase prosperity and ensure a safe and secure environment for our citizens. The institutions will play their full role in this endeavour.

 

We now expect the United Kingdom government to give effect to this decision of the British people as soon as possible, however painful that process may be. Any delay would unnecessarily prolong uncertainty. We have rules to deal with this in an orderly way. Article 50 of the Treaty on European Union sets out the procedure to be followed if a Member State decides to leave the European Union. We stand ready to launch negotiations swiftly with the United Kingdom regarding the terms and conditions of its withdrawal from the European Union. Until this process of negotiations is over, the United Kingdom remains a member of the European Union, with all the rights and obligations that derive from this.  According to the Treaties which the United Kingdom has ratified, EU law continues to apply to the full to and in the United Kingdom until it is no longer a Member.

 

As agreed, the “New Settlement for the United Kingdom within the European Union”, reached at the European Council on 18-19 February 2016, will now not take effect and ceases to exist. There will be no renegotiation.

 

As regards the United Kingdom, we hope to have it as a close partner of the European Union also in the future. We expect the United Kingdom to formulate its proposals in this respect. Any agreement, which will be concluded with the United Kingdom as a third country, will have to reflect the interests of both sides and be balanced in terms of rights and obligations.”

Then there was the ECB's Nowotny who likewise pretended that things are ok, when in reality they will never again be the same:

  • NOWOTNY: THE MARKETS WERE SURPRISED BY BREXIT
  • NOWOTNY: AT THIS POINT WE ARE AGAIN SEEING STABILIZATION
  • NOWOTNY: CAN'T COMPARE CURRENT SITUATION WITH LEHMAN
  • NOWOTNY: NEGATIVE BUT LIMITED EFFECT ON SOUTHERN EMU SOV PAPER
  • NOWOTNY: IF BANKS HAD BREXIT TROUBLE,ECB WLD PROVIDE LIQUIDITY
  • NOWOTNY: PANIC IS ABSOLUTELY NOT JUSTIFIED

Right:

 

Meanwhile, confirming that the UK move was correct and that the UK will have a full victory, Handelsblatt reported that Germany just blinked first:

  • PAPER: GERMANY TO SEEK ASSOCIATE STATUS FOR UK VIS-A-VIS EU
  • PAPER:GERMANY AGAINST AUTOMATISM ON UK ACCESS TO EU INTRNL MKT

Finally, there was the queen herself, Angela Merkel, who suddenly sees not only her kingdom but her "United Europe" legacy falling apart before her eyes.  And so a gusher of Soviet-style propaganda has been unleashed:

  • MERKEL CALLS FOR CALM, MEASURED EU RESPONSE TO BREXIT VOTE
  • MERKEL: NEED TO MAKE SURE PEOPLE UNDERSTAND BENEFITS OF EU
  • MERKEL: EU GUARANTEES PEACE AND PROSPERITY
  • MERKEL: INVITED EU TUSK, FRANCE HOLLAND, ITALY RENZI TO BERLIN

As MarketNews adds, Merkel urged a calm reaction to the Brexit vote Friday, announcing a high-level meeting Monday to prepare for the EU Council gathering the following day. Giving an ad-hoc statement to the press at the Chancellery in Berlin, Merkel said she would meet with EU Council President Donald Tusk, France's President Francois Holland and Italy's Prime Minister Matteo Renzi Monday in Berlin to hold talks about the Brexit issue and present the talks' results to the EU Council, to be held next Tuesday and Wednesday in Brussels.

"We are taking note of the UK decision with great regret," Merkel said, explaining that the consequences of the UK decision "over the next days, weeks and months" would depend on the EU's ability to make calm and joint decisions.

Noting growing doubts about the EU across Europe, Merkel said it was important to explain the EU's benefits to the public, saying the bloc was "our guarantor of peace and prosperity." Merkel also announced she will lay out the German government's next steps with respect to Brexit in a speech at the German parliament next Tuesday.

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Whether, and how long, Europe will exist in its current format after last night's historic event is unknown. One thing is known: there is one very clear victor from the perilous state Europe has suddenly found itself in.