FRIDAY JULY 15, 2016 • T H I S D AY
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INTERNATIONAL
email:foreigndesk@thisdaylive.com
May Shakes up British Govt in Preparation for Brexit
Zacheaus Somorin with agency reports
New Prime Minister Theresa May showed a ruthless streak yesterday in building a cabinet to lead Britain’s exit from the European Union, while her finance minister said he would do whatever was necessary to restore confidence in the economy. A day after replacing David Cameron,according to Reuters, May moved to impose her authority by axing a handful of prominent ministers including Justice Secretary Michael Gove, a leading ‘Brexit’ campaigner who had staged his own bid for prime minister. Her most contentious appointment is Foreign Secretary Boris Johnson, who compared the EU’s aims to those of Hitler and Napoleon during the campaign leading up to Britain’s vote last month to quit the 28-nation bloc. The surprise choice drew a withering response from French Foreign Minister Jean-Marc Ayrault, who described the former London mayor as a liar. Three weeks after the referendum, May’s new government faces the formidably complex task of extricating Britain from the EU - itself reeling from the shock of Brexit - while trying to protect the economy from feared disruption to confidence, trade and investment. The Bank of England kept interest rates unchanged on
Thursday, wrong-footing many investors who had expected the first cut in more than seven years. But it said it was likely to deliver a stimulus in three weeks’ time to support the economy, once it has assessed the fallout from the June 23 vote. The pound rose sharply on the news, while shares fell. New finance minister Philip Hammond signaled he would take a less aggressive approach to cutting the budget deficit than his predecessor George Osborne, who was dumped on Wednesday. “Markets do need signals of reassurance, they need to know that we will do whatever is necessary to keep the economy on track,” Hammond said. “Of course we’ve got to reduce the deficit further but looking at how and when and at what pace we do that ... is something that we now need to consider in the light of the new circumstances that the economy is facing.” May, who had favoured a vote to stay in the EU, must now decide when and how to start official divorce proceedings from the other 27 countries, who are pressing her to move quickly to lift the uncertainty now hanging over them all. In her first words to the nation on Wednesday,shepromisedtochampion socialjusticeandtohelpordinary Britons in their struggle to make ends meet. “The government I lead will be driven not be the interests of the privileged few, but by yours. We will do everything we can to give
you more control over your lives,” she said. BritonschoseBrexitdespite a barrage of warnings that severing ties would create huge uncertainty and plunge the economy into recession. The winning ‘Leave’ campaign dismissed what it called ‘Project Fear’, saying Britain would prosper if it regained independence from Brussels. One of the first economic indicators to capture the postreferendum mood showed on Thursday that British consumer confidence fell sharply after the vote. The Thomson Reuters/Ipsos Primary Consumer Sentiment Index fell to 49.4 in July from last month’s 51.2. “It’s too early for most people to experience any direct economic impacts from Brexit, but fear for the future is clearly being felt by many,” said Bobby Duffy, managing director of public affairs at Ipsos MORI. In one of her first acts, May dismissed finance minister Osborne, a figure synonymous with austerity policies and a leading voice among those who had warned that leaving the EU would spell economic doom. On Thursday she followed up by removing the justice, education, culture and cabinet office ministers. Work and pensions minister Stephen Crabb, who had also sought the prime minister’s job, resigned citing family reasons, days after the married politician had hit the front pages for allegedly sending
flirtatious WhatsApp messages to a young woman. The Northern Ireland minister also quit. Veteran right-wingers David Davis and Liam Fox - both ardent campaigners for Brexit - have been named, respectively, as Secretary of State for Exiting the European Union and head of a new international trade department, key positions in the arduous negotiations ahead. Asked if Britain would launch the formal process of quitting the EU by the end of this year, finance minister Hammond told LBC radio: “No, that’s a decision that we haven’t made yet.” He said the decision to vote for Brexit would mean Britain would leave the EU’s tariff-free single market, and it would then have to negotiate a new deal as a trading partner rather than a member. “The question is how we negotiate with the European Union not from the point of view of being members but from the point of view of being close neighbours and trade partners,” he added.
US Launches Quiet Diplomacy to Ease South China Sea Tension The United States is using quiet diplomacy to persuade the Philippines, Indonesia, Vietnam and other Asian nations not to move aggressively to capitalize on an international court ruling that denied China’s claims to the South China Sea, several U.S. administration officials said on Wednesday. “What we want is to quiet things down so these issues can be addressed rationally instead of emotionally,” said one official, who spoke on the condition of anonymity to describe private diplomatic messages. Some were sent through U.S. embassies abroad and foreign missions in Washington, while others were conveyed directly to top officials by Defense Secretary Ash Carter, Secretary of State John Kerry and other senior officials, the sources said. “This is a blanket call for quiet, not some attempt to rally the region against China, which would play into a false narrative that the U.S. is leading a coalition to contain China,” the official added. The effort to calm the waters following the court ruling in The Hague on Tuesday suffered a setback when Taiwan dispatched a warship to the area, with President Tsai Ing-wen telling sailors that their mission was to defend Taiwan’s maritime territory. The court ruled that while China has no historic rights to the area within its self-declared nine-dash line, Taiwan has no right to Itu Aba,
also called Taiping, the largest island in the Spratlys. Taipei administers Itu Aba but the tribunal called it a “rock”, according to the legal definition. The U.S. officials said they hoped the U.S. diplomatic initiative would be more successful in Indonesia, which wants to send hundreds of fishermen to the Natuna Islands to assert its sovereignty over nearby areas of the South China Sea to which China says it also has claims, and in the Philippines, whose fishermen have been harassed by Chinese coast guard and naval vessels. One official said new Philippine President Rodrigo Duterte remains “somewhat of an unknown quantity” who has been alternately bellicose and accommodating toward China. Philippine Defense Secretary Delfin Lorenzana said that ahead of the ruling he had spoken to Carter, who he said told him China had assured the United States it would exercise restraint, and that the U.S. government made the same assurance. Carter had sought and been given the same assurance from the Philippines, Lorenzana added. China, for its part, repeated pleas for talks between Beijing and Manila, with Foreign Minister Wang Yi saying it is time to get things back on the “right track” after the “farce” of the case. On Thursday, the official newspaper of China’s ruling
Communist Party said China had shown it can fix territorial issues via talks, pointing to agreement reached with Vietnam over their maritime boundary in the Gulf of Tonkin and ongoing talks with South Korea. “China is a faithful defender of the principle that countries large and small are equal and has consistently upheld using consultations to resolve border issues on the basis of sovereign equality and mutual respect,” the People’s Daily said in a commentary. Meanwhile, two Chinese civilian aircraft landed on Wednesday at two new airports on reefs controlled by China in the Spratly Islands in the South China Sea, a move the State Department said would increase tensions rather than lower them. “We don’t have a dog in this fight other than our belief ... in freedom of navigation,” State Department spokesman Mark Toner told a briefing on Wednesday. “What we want to see in this very tense part of Asia, of the Pacific, rather, is a de-escalation of tensions and we want to see all claimants take a moment to look at how we can find a peaceful way forward.” However, if that effort fails, and competition escalates into confrontation, U.S. air and naval forces are prepared to uphold freedom of maritime and air navigation in the disputed area, a defense official said on Wednesday.
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