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White House seeks to assure U.K., U.S. markets after Brexit vote

MoneyWatch Headlines for June 24, 2016
MoneyWatch Headlines for June 24, 2016 01:11

After Thursday's historic vote breaking off the United Kingdom from the European Union, President Obama and his administration went into damage control mode for their allies across the pond, seeking to reassure them that the U.S. would continue to maintain relationships with Britain and the EU.

"While the U.K.'s relationship with the EU will change, one thing that will not change is the special relationship that exists between our two nations -- that will endure," the president said Friday at the Global Entrepreneurship Summit in Stanford University. "The European Union will remain one of our indispensable partners, our NATO alliance will remain a cornerstone of global security."

"Our shared values, including our commitment to democracy, and pluralism and opportunity for all people in a globalized world -- that will continue to unite all of us," he added.

The Brexit vote, the president noted, "speaks to the ongoing changes and challenges that are raised by globalization."

Mr. Obama also mentioned his talks with Prime Minister David Cameron, who announced his resignation shortly after the vote results came in, and German Chancellor Angela Merkel.

"David has been an outstanding friend and partner on the global stage," the president said. "And based on our conversation, I am confident that the United Kingdom is committed to an orderly transition out of the European Union."

Of his discussion with Merkel, the president said the two "agreed that the U.S. and allies will work closely in the weeks and months ahead."

In a separate statement early Friday morning, Mr. Obama acknowledged that "the people of the United Kingdom have spoken, and we respect their decision."

Obama pushes UK to stay in the EU during Lond... 02:51

The president had previously encouraged British voters to stay in the European Union, announcing his position during his last visit to England in April.

"I'm not coming here to fix any votes. I'm not casting a vote myself. I'm offering my opinion," Mr. Obama said at a press conference in London earlier this year. "The United States wants a strong United Kingdom as a partner, and the United Kingdom is at its best when it's helping to lead a strong Europe. It leverages U.K. power to be part of the European Union."

The president, standing at the time alongside Prime Minister David Cameron (who resigned , argued that the referendum would have a disastrous effect on the two allies' trade future.

"Our focus is in negotiating with a big block of the European Union to get a trade agreement done," the president said in April, predicting that if the British voted to leave the EU, "the U.K. is going to be in the back of the queue."

On Friday, Vice President Joe Biden, who was attending a medal ceremony at Trinity College in Dublin, also attempted to reassure Ireland and the EU about the stability of their relationships with the U.S.

"I must say we had looked for a different outcome. We would have preferred a different outcome," Biden said at the Irish university, where he was awarded an honorary law doctorate. "And I would imagine many of you here felt the same way.

"But as the United States has a long standing friendship with the United Kingdom, one of the world's great democracies, we respect the decision that they have made," Biden added. "And I want to assure all of you in this room that America's special bond with the United Kingdom runs deep, and it will endure, and our relationship with Ireland and with the European Union will remain the cornerstone of our global engagement."

As the Brexit vote triggered a global market crash that's spreading to the U.S. stock markets, and the British pound plummeted, the Treasury Department and the Federal Reserve released statements that sought to calm investors.

Treasury Secretary Jack Lew released a statement promising that the U.S. would "work closely with both London and Brussels and our international partners to ensure continued economic stability, security, and prosperity in Europe and beyond."

Lew added that the department would "continue to monitor developments in financial markets."

"The UK and other policymakers have the tools necessary to support financial stability, which is key to economic growth," he wrote.

The Federal Reserve, in its own statement Friday, promised it would help with a safety net of "dollar liquidity" for the global economy if necessary.

"The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy," the statement read.

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