In the wake of the stunning Brexit vote Europe hit has been hit by several further crises:
Turmoil in UK politics
British politics has most likely never seen a week like the last one where the country voted to leave the European Union. Sitting PM David Cameron announced he would resign by October, the opposition Labour party has refused to resign despite having dozens of ministers and officials resign and losing a ‘no confidence’ vote in his leadership (it was passed 172 votes to 40) and Boris Johnson, the front runner to replace David Cameron, announcing that he would not contest the conservative party leadership.
The political mess has clouded the next moves in the Brexit saga which will clearly take some time to resolve. The EU is urging Britain to move quickly on triggering Article 50 of the Lisbon Treaty which would then start the two year clock ticking on Brexit. There is much debate about what sort of Brexit the country wants and who will actually do the negotiating.
In the meantime the UK has lost its AAA rating. S&P Global marked it down by two notches to AA and a few days later the EU had its credit rating lowered to AA from AA+.
Austrian election result overturned
The far right party of Norbert Hofer narrowly lost the recent Austrian elections by 31,000 votes. However, the result was challenged in court as there were irregularities in the counting of postal votes and this week was overturned. A re-run of the election has been ordered with Hofer’s party favoured to win.
The EU Commission president Jean-Claude Juncker said after the first election result that he would use all his powers to block right wing governments from power. “There will be no debate or dialogue with the far-right” he said.
This seems an extraordinary statement and one that has been used by the British to justify the uprising against the EU as it would appear to directly act against the democratic wishes of a nation. But there is form here and in 2014, the EU Commission was given new powers which have been used in this vein already. Poland’s elected, conservative leaders have already seen the EU used the “rule of law mechanism” (Article 7 TEU) – a rule used against nations the EU perceives as deviating from “the common constitutional traditions of all Member States.” The law allows for far reaching sanctions by the EU and a country can be stripped of all voting rights in the EU and have funding blocked.