Does Britain fear Germany will head a Euro Army? Beware…………..The Rose in Winter.

Jon

http://www.cityam.com/250847/german-defence-minister-warns-uk-against-messing-eu

German defence minister Ursula von der Leyen has warned the UK against getting involved in EU security matters.

“The plea to the British is only not to block important European developments, when they say they want Brexit,” von der Leyen told the Financial Times.

“It is not good to prevent Europe from organising itself better.”

Read more: Britain to veto establishment of an EU army

The comments from von der Leyen came weeks after Britain’s defence secretary Michael Fallon said the UK would block the formation of an EU army.

Standing together, Germany’s Defense Minister Ursula von der Leyen and her French counterpart Jean-Yves Le Drian were at pains to stress there were no plans for army of European soldiers wearing the same uniforms.

“On the contrary,” von der Leyen said. “It is about bundling the various strengths of European countries to be ready to act together quickly.”

The cost of insurance against swings in sterling also jumped more than 20 percent this morning after the pound fell to a 31-year low against the dollar. It is now 2016’s worst-performing major currency.

Government bonds also declined on Thursday as the weaker exchange rate boosted inflation expectations. Even stocks, which were previously lifted by sterling’s slide, were infected as the FTSE 100 Index fell for a second day.

Even before what traders are now calling a “flash crash,” the decline in sterling suggests investors are now anxious that Prime Minister Theresa May is prioritizing the control of immigration over safeguarding trade and banking. French President François Hollande and German Chancellor Angela Merkel both said on Thursday that leaving the European Union carried costs.

“There has to be a price to pay or else the negotiations won’t go well,” said Hollande.

Washington Worries

Brexit was the talk of the town as bankers and policy makers gathered in Washington for the International Monetary Fund’s annual meetings. Some in Washington spoke of Brexit as the new version of the Greek crisis they’ve spent years battling.

The market rot highlighted to Rupert Harrison, a former U.K. Treasury official, the naiveté and optimism surrounding Britain’s decision.

“You are heading for quite a hard Brexit combined with a very detailed bilateral negotiation,” said Harrison, now chief macro strategist at BlackRock.

Stephanie Flanders of JPMorgan Asset Management, said her long-term economic assessments were now based on the likelihood of a “harder-case scenario.”