The Brexit Drama Continues Under New Management
We have previously commented on the status and complexity of Great Britain’s struggles with Brexit, most recently on April 30, 2019 (Understanding Brexit).
Boris Johnson has won the race to lead the ruling Conservative Party and become Britain’s prime minister, succeeding Mrs. May. He inherits the difficulties and conflicts of the country’s decision to leave the EU, the primary cause of the failure of Mrs. May’s tenure as prime minister.
What now? Mr. Johnson has made it clear that he intends to lead Britain out of the EU by the October 31, 2019 deadline. While Mr. Johnson has never offered a clear plan, it is believed that he will begin by seeking additional concessions from the EU. Failing that, he may be faced with the same fate as Mrs. May, who negotiated a withdrawal agreement with the EU, only to see it voted down three times by the House of Commons.
If all else fails, Mr. Johnson could end up calling a new election to seek a renewed Brexit mandate. Calling an election would be risky. The opposition Labour Party is led by Jeremy Corbyn, a fully committed socialist, who is anti-American and has winked at anti-Semitism.
Investors should be aware that Brexit remains very controversial in Britain, with most polls continuing to show a roughly 50/50 split in public sentiment.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA