New UK leader faces the same old challenges, decisions may drag economy into recession

Source:Global Times Published: 2019/7/25 20:18:40

Though the UK is going to have Boris Johnson as its new prime minister, old problems still linger on the path to ending the long and drawn-out Brexit chaos by the October 31 deadline.

Analysts say Johnson won his party but not the country. That means, to finally take the UK out of the European Union (EU), he has to unite his fellow Tories, and more importantly, rally a divided parliament.

Johnson's tough Brexit stance could lead to a string of front-bench resignations. Chancellor of the Exchequer Philip Hammond has already stated publicly that he will quit, saying he cannot support the possibility of a no-deal Brexit.

Given the deadlock in British parliament where lawmakers vow to overturn any government that attempts to leave the EU without a deal, if Johnson's government cannot negotiate a new deal with the bloc and force a "no-deal" Brexit, it might lose a no-confidence vote in parliament, thus sparking an early general election with the now-ruling Conservative party facing an unprecedented challenge. Such concerns are not unwarranted. Uncertainty around Brexit has been dragging the British economy and a "no-deal" Brexit could plunge the UK into recession.

The UK's economic growth has stalled, the National Institute of Economic and Social Research (NIESR), a London-based independent economics and finance think tank, said on Monday. If a no-deal Brexit is avoided, NIESR expected British economic growth to be little above 1 percent in 2019 and 2020.

EU leaders on the other side at the negotiating table congratulated Johnson on his victory but remain tough on the breakup.

Michel Barnier, the EU's chief Brexit negotiator, tweeted that they look forward to "working constructively" with Johnson when he takes office, to facilitate the ratification of "the Withdrawal Agreement." There is a strong mutual interdependence between the UK and the other European economies. 

Brexit is "like taking an egg out of an omelet," Pascal Lamy, former director-general of the WTO, warned.

To finally achieve his task, Johnson will have to go through tough challenges. Whether he can fulfill his promises on leaving the EU, with or without a deal, is still unknown and for all to see in the near future.

The article is from the Xinhua News Agency.

Posted in: INSIDER'S EYE

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