tv Washington Journal CSPAN June 26, 2016 9:10pm-9:33pm EDT
honored to have served and i will do everything i can in the future to help this great country succeed. thank you very much. the uk's decision to exit the eu is a topic likely to come up this week when the prime ministers takes questions from members of the house of commons. watch live on wednesday at 7:00 eastern on c-span two. more on the boat and the and back on the financial market from today's washington journal. our first guest of the morning is ian talley of the "wall street journal." brexitere to talk about
or the decision by britain to separate from the european union. your paper, if you take a look at the website of the front page, the headline on the website, is your reaction to brexit. it shows rifts. guest: there are questions about trade relationship in the political relationship. the special relationship in washington with london won't disappear. there is a very long history there. there are more questions about u.s. policy will interact with the eu. with.s. policy with trade the eu in london separately will interact. in the economic and political shockwaves that will continue to reverberate into the u.s. economy. host: are there any other current trade deals are trade issues that are directly affected between united states and members of the european
union? guest: there is a long-running negotiation with the transatlantic partnership. there are questions about how that will be affected. was not just on security issues and not often seen i die with washington. well, so the u.s. -- those negotiations may be more difficult now without the u.k. in the eu. host: as far as the united states financially, what should be expected long-term as far as this decision? we saw the initial reaction of the stock market. is this a continuing thing? beside the initial reaction, the uncertainty of what is going to happen with the eu/u.k. relationship.
how will that unfold? that weighs on investor's sentiment and consumer sentiment. it will weigh on the dollar as well. all of that will continue to wait on the u.s. economy and the global economy for a long time to come. i don't expect the type of most we saw last week will continue to happen over and over again. we may see some more moves in the next several weeks. of move, i don't think we are in the same crisis. i don't expect that at all. host: visited him -- there are stories in a paper saying the eu setetting on this quick, or a more exaggerated timeline of the united kingdom or britain wants to, does that play into how it affects us? guest: absolutely.
any uncertainty will cause business leaders to say do i really want to invest in this process? if i don't know what the outlook is going to be? uncertainty prevents those investments which keep growth down. that is what you have business leaders saying, u.k., let's get through this process quickly. the head of the imf, madame guard said we must deal with the new relationship and what it will be. yet some leaders calling for that. time, the process takes at least two years to exit the relationship. saying we need to take this low. whereso have a dynamic there are other factors, political factors within the european union thinking about exiting as well, calling for referendums as well.
reaction may be to treat them harshly and abuse the political parties at home. this will be worked out quickly and carefully like the markets want. host: the brexit impact on united states is our topic for our for segment this morning. if you want to as questions of our guest, ian talley, 202-748-8000 four republicans. four democrats. independence, 202-748-8003. he will want to reassure markets and want to explain to the public how this'll filter into the u.s. economy and what the u.s. is prepared to do to
markets.ilize u.s. they have already done that. the fed is issued a statement saying we are prepared to help markets both here and internationally because of the spillover affect. that is her first priority -- that is they are first priority now -- that is their first priority now. they want to clarify the relationship. whatever relationship they do for growth andst for the u.s.. as far as theill bhost: treasury department, used a phrase that they may use currency swap lines. can you explain what that is? guest: in the 20 oh eight, 2009
financial crisis, when everybody was freaking out, nobody wanted -- there was limited dollars in the global market. what the fed did was basically open up its checkbook and say, look, bank of england, if your banking system needs cash and if you are short of cash, you can borrow with us on a very short-term and we will land you those dollars -- we will lend you those dollars. it will help to get some of the sand out of the gears in the economy. so now, because of the fears banks holding onto dollars, the fed had those swap lines already opened. but it is your the markets that they were there for anyone to tap, whether in europe or in asia or in the u.k. host: first call for you comes
from texas on her democrats'line. hi, there. caller: hi. good morning to both. to be i was lucky enough an american that lived overseas for 10 years. i know about how the government tends to work and the people there. a couple of things -- i predict that the u.k. will never leave the eu for the following reasons -- number one because of the turmoil it will throw the country into. the people already have buyer's remorse and don't really want to leave. and the effects that it will have on our economy. britain,as we are to we will never subsidize a loan. that is point number one. number two, i think it is remarkable that the party, their
global ideology that is put in -- that is put the u.k. in the position that they are in. their wages are stagnant and they are left behind. it is the vary same policies that are promoted by the republican party and right-wing groups that want more economy. -- and what more autonomy. guest: thank you for that. surprising in just watching this unfold on thursday night into friday morning, was the amount of support from the u.k. voters to leave. there is some question about how that will work out and how long london will take to negotiate that. clearlyink voters spoke what theat they fear
eu relationship is like. there is immigration issue. there is the economic issue are already economic issue playing for several years. because of the economic implications, they have already a very toughcing economic environment for years now. that is one of the thing that drove this anti-eu sentiment. i think you are right that people may say, wow, what have we done? -- we could see a lot of inflation in the u.k. the pound will drop in that will undermine wages. there is a real risk that there will be a backlash. sure thatot show people will make that when your connection that you are making about that this is the wrong
thing to do. i think it may take a while to percolate to the consciousness, but i am not sure that is a reaction we will get immediately. does it,s is the will pennsylvania. richard, go ahead. caller: i am curious about the populace backlash within europe and within the whole european union and economy as far as age groups. larger olderily a vote. about from their economic perspective, when you say immigration, the amount of european, i guess it would be high skilled workers who are able to come across the borders, and are allowed to come across , is itders and get jobs the same as the kind of conflict
in the u.s. with a jumper just the patient raping low? low.the economy being -- in the u.s. with the economy being low. guest: excellent points and questions. i do think there is a real concern about the wider populist movement within europe. i think that is why you have the far right in france and in the netherlands calling for -- parties that are getting in the polls and there are elections next year are calling for a eu referendum themselves.
immigrationhere crisis europe has been going through has been a primary driver of that. that is why you have austria and hungary talking about me negotiating the terms in the eu and trying to get a stronger immigration control their. re. you have many people flooding into europe from syria, from turkey, from north africa. leaving a terrible life foring a better their children and for their families. at the same time, you have the background of the european debt crisis with super high unemployment. greece unemployment for is near 6%. in spain, i think unemployment
is there 25%. a very high employment. when you have those two things together, you have a great deal of fear about job security and growth. arethere is also there people who left after prejudices , and those fears prevent and work together. and they say, the eu is to blame here. whether that is right or not, that is the perception. so there is a broader fear that the eu will disintegrate. to put this in the biggest possible picture, the eu, the european union project is a post-world war ii project that came out of two world wars were there were vast amounts of death , and terrible violence. economy was decimated.
the concept here was, let's integrate and let's ensure we don't have this type of tribal warfare anymore. and so, what you are seeing is a potential unraveling of that whole concept. so, one yes, i think immigration drove it. two, i think economic fear stroke it. three, i think it is a very real possibility we will see more and that will the weighing on markets. have an economic question about our future. there is an immigration laments people's fears either rightly or wrongly. because we have a declining , and a defined
population means we can't grow as fast. helpmmigration can also and economy -- and we economy. economy. the question is how deregulate those borders? those are the questions politicians are rustling with. greg int's hear from south carolina on the republican's line. you are on. somethings, this is that is strictly an economic theory. it is a rejection of keynesian economics. i think britain is going back hopefully to -- really what made them great -- being awoken to
the writings -- maybe that is what they are looking at. especially with the older generation that voted to leave the eu. they realized kinsey and theories are not working and they want to get back to basics. guest: i think if you were to ask most of the 52% of the u.k. that, they probably would not be able to elaborate. i think you are thinking on a very academic basis here. argumentthere is not a to make about how much the government has evolved in terms of financing. i think there is certainly some of that here. i think much of the relationship, the tensions between the relationship with europe over the last several years.
eu's, brussel's control of the pursestrings. question, when did this to happen? this those happened in the context of the immigration crisis. you have to member that the u.k. -- you have to remember that the u.k. was running the less keynesian economies. the government had champion this austerity is showing more growth in most of the other economies within the eu. the exaction whether economic models you are talking about was a primary driver here. i do think that it did exacerbate tensions. but keynesian is talking about
the government injecting growth into the economy through his more of aking government hands-off approach. think in a sort of political realm in terms of regulation, yes, it did add to it. were saying, we don't need a bureaucrat in brussels telling us how to run our economy. we are a sovereign nation and we don't want you telling us what to do. in that sense, you are hitting the nail on the head. but may be part of the reason why you have the republican leadership, paul ryan saying, we get it. there is a sense in which a republican is under the idea that the state should reserve a more -- should reserve more of their power and less of a centralized hand in the economy.
in general, there is some sympathy there. host: ian talley of the "wall street journal" joining us covering the economics and talking about the brexit as it is known as. what are the specific questions facing britain? what has to be done for them to separate themselves from the eu? guest: first, prime minister cameron has to go to the eu and officially say, we are going to leave. when he does that, i am not sure. if he will do it, i am not sure. he already said he is going to resign saying he does not feel like he can lead a party that can lead the exit. so, once that modification is made, the u.k. and the eu leaders will negotiate their new terms of the relationship. what will trade look like? what will regulations look like? what will immigration borders
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