Prime Minister Theresa May’s decision to hold a snap election to strengthen her hand in Brexit talks has been disastrous, leaving the country in uncharted territory, Swiss-based observers say.
On Thursday, British voters dealt the governing Conservative party a punishing blow, when May’s election gamble to win a stronger mandate backfired and she lost her parliamentary majority. This has thrown British politics into turmoil with a hung parliament (when no party has an absolute majority) and potentially disrupting Brexit negotiations.
Participants at a British-Swiss Chamber of Commerce event in Geneva agreed that the result presented an extremely negative scenario.
“The UK is now ungovernable,” declared Victoria Curzon-Price, economics professor of the University of Geneva. “The parties are divided internally, as are politicians in Westminster. There are too many tensions between the various parts of the UK. We live in Switzerland, which has been decentralised to the extreme, and it works. Countries like Britain, France and Germany are just too big to govern like this.”
She believes May could form a minority government and stagger on for a few weeks but "not for long and with no authority. I can only see another election on the horizon".
‘Not up to the job’
Andrew Gowers of Geneva-based trader Trafigura, and former editor of the Financial Times, said May’s gamble had failed dramatically.
“The idea that May needed a strong mandate for Brexit negotiations was a flimsy excuse. This election was about her personal standing and she failed catastrophically,” he told the British-Swiss Chamber of Commerce audience.
“We now have a hung parliament and a resurgent Labour Party against all expectations and a growing youth vote. It’s a completely new constellation. We are starting to look like Italy politically.”
He said May’s campaign had revealed that she was "not up to the job" as a political leader.
“She doesn’t have the breadth of vision or ability to work with people. The knives will be out and if she manages to hang on today there will still be question marks next week,” Gowers added.
Geneva-based banker Peter Payne said the result was unlikely to have a direct impact on his financial work but he felt there would be much uncertainty ahead.
“Theresa May wanted to bring the Conservative Party together but has failed dismally,” he declared.
Britain's pound took a battering on Friday. Sterling fell 2% to $1.2698 after sliding as much as 2.5% to $1.2636 in early European trade, its weakest level since April 18.
Brexit in the fog
The uncertain result comes just ten days before the start of negotiations on Britain's divorce from the European Union.
Early editorials in the Swiss papers focused on the possible consequences for the forthcoming Brexit negotiations.
“On Friday morning in London, nobody knows if a negotiating team will actually be available for the Brexit negotiations, which are due to begin in Brussels next week,” the German-language Tages-Anzeiger commented. “The whole Brexit politics has been put into question and no one is saying how it should proceed from here.”
The Neue Zürcher Zeitung (NZZ) agreed that the result had further complicated the extremely complex negotiations ahead.
“While it might be tempting for some Europeans to greet the dismantling of the often aloof and confrontational Tory government with schadenfreude, this would be a delusion. The election debacle for Britain’s ruling party does not help Europe,” the NZZ said.
“Now it is really unclear what the island really wants – from Europe, from the world and even from itself. The European Union will now have to chart a course through the exit negotiations in the fog, where the end goal is blurred or even invisible," it added.
“This confusion, and May’s humiliation, could be exploited by hard-boiled Brexit nationalists. If that happens, we can expect extremely confrontational negotiations. This would be difficult for both Britain and for Europe.”