Will the March 2019 deadline slip?

U.K. Trade Secretary Liam Fox (pictured) was pretty clear on Monday. “We will leave the European Union at the end of March 2019,” he said in Washington. “There’s no doubt about it.”
Not all are so sure. In fact, some Brexit-watchers suggest that Britain won’t actually leave as planned on March 29, 2019.

Article 50 of the Lisbon Treaty states that extending the timeframe for talks would require the unanimous consent of all 28 members of the EU, including the U.K. Malcolm Barr, an economist at JPMorgan Chase, and Lucy Thomas, who helped run the Remain campaign and now works for Edelman, are among those who say they see how that could happen.
Barr’s theory is that the two-year timetable set aside for negotiations was already demanding even before political events in Britain delayed the start of them. A messy divorce is also not in the EU’s interest, he said.
It “hurts everyone to have a disorderly Brexit,” said Barr, who noted Greece missed numerous EU deadlines to fix its finances.
He puts the chances of Brexit occurring at the end of March 2019 as less than 50 percent, and instead sees a delay until the final months of that year.
“The only thing you really need is political will,” said Thomas. “If there’s a sense in Brussels and across European capitals that the Brits have behaved badly and deliberately stalled or played dirty, there will not be a willingness to extend and help us out.”
At the moment the EU is sounding irritable. In a meeting with regional ambassadors in Brussels on Wednesday, chief negotiator Michel Barnier expressed frustration with the slow pace of progress in the talks, a person present said. 
Ongoing differences over the future of Britain’s relationship with the European Court of Justice are also overshadowing talks. Just this morning the Daily Express cited a senior U.K. government minister saying that Britain may walk away because of differences over the ECJ.
Migration Study
Prime Minister Theresa May’s government has commissioned a report assessing the impact of EU workers on the British economy, prompting questions as to why such a study wasn’t conducted earlier.
Home Secretary Amber Rudd on Thursday will ask the independent Migration Advisory Committee to study the role of EU nationals in the U.K. economy, as plans are developed to control migration from Europe after Brexit. The final study will be completed in September 2018, though the committee will be encouraged to publish interim reports.
Rudd will also confirm the government intends to seek a transition period to implement the immigration changes and avoid a “cliff-edge” for businesses and EU nationals.
The U.K. does not want fewer migrants coming to work in the tech industry as a result of Brexit, Foreign Secretary Boris Johnson said on Wednesday.
Separately, a House of Lords panel raised questions about how a transitional deal can be struck by warning that the lapse of an agreement providing for the extradition of criminals between the U.K. and the EU poses an “unacceptable” risk. 
Company Comments
  • A bumper day of earnings reports offers the chance to hear corporate commentaries on Brexit. Follow live on Bloomberg TV
  • The stock of broadcaster ITV gained as a stable full-year outlook and higher dividend helped offset concerns of a Brexit-driven ad slowdown
  • Employment agency Robert Walters said banks increased specialist hiring in the first quarter. It also said banks will have to increase salaries because of a skills shortage in some European cities
  • Airbus’s superjumbo production cuts are starting to affect suppliers, with GKN Plc saying the slow-selling A380 is weighing on revenue. With aviation production so intertwined, the U.K. engineering firm is considering following Airbus if the planemaker moves plants abroad after Brexit
  • GlaxoSmithKline CEO Emma Walmsley said she was encouraged that the government is adopting a more pragmatic approach towards Brexit
  • U.S. carmaker Ford reiterated that its 2017 profits will take a $600 million hit due to Brexit.

May Loses More Staff

May’s director of strategy resigned, leaving her government without the authors of her Brexit vision at a critical time in negotiations with the EU.
Chris Wilkins will leave his post at the end of this week, he told Bloomberg’s Tim Ross by telephone on Wednesday.
The departure means that May has lost both her top strategists in the wake of last month’s general election. Nick Timothy, her co-chief of staff, quit the day after May’s Conservatives were stripped of their parliamentary majority in the poll. 
He and Wilkins wrote the Brexit speech in January in which she set out her plan to take the U.K. out of the single market and customs union.

Brexit in Brief

  • U.K. economic growth picked up only modestly to 0.3 percent last quarter, compounding what the Office for National Statistics called a “notable slowdown in the first half.” Chancellor of the Exchequer Philip Hammond told Sky News that Brexit is partly responsible for the weakness.
  • JPMorgan is looking at merging its U.K.-based private banking arm into its wider European wealth operation ahead of Brexit, according to Sky News
  • Environment Secretary Michael Gove says Britain won’t allow in imports of American chlorine-washed chicken as part of the post-Brexit trade deal it’s seeking with the U.S.
  • The U.K. is expecting to make a financial settlement to the EU of about £50 billion, Buzzfeed says.


Comentarios

Publicar un comentario

Entradas populares de este blog

Who are EU talking to?

Imagen
European governments are starting to say in public what they’ve long hinted in private: they don’t know how to deal with a U.K. government that is so divided on Brexit that no one knows what it wants. In unusually candid comments, Irish Prime Minister Leo Varadkar told the BBC on Tuesday that the government’s internal disputes made it a difficult negotiating partner. “It is quite a difficult negotiation when people who want to leave the European Union in Britain don’t really seem to agree among themselves what that actually means.” Others have also come out publicly to say what’s been hobbling negotiations, which have stalled again only weeks after Prime Minister Theresa May’s speech in Florence. That had fueled hope on the EU side that some progress could be made. A European summit on Thursday and Friday – originally slated as the date when talks would move on from the divorce settlement to future trade arrangements – will yield little on the Brexit front, with leaders p...
Leer más

Not today

Imagen
Once flagged as the moment when a Brexit deal could start coming together, a lunch between Prime Minister Theresa May and European Commission President Jean-Claude Juncker in Brussels on Monday won’t be the breakthrough some hoped as recently as a week ago. U.K. officials are managing down expectations. It’s not just that a deal on the Irish border remains elusive. The issue of what role the European Court of Justice can have post-Brexit has re-emerged as a major stumbling block after a weekend of intense back-and-forth, according to people on both sides. The ECJ has totemic importance for the Brexit backers in May’s Conservative Party, who see it as a symbol of lost sovereignty. On the EU side, it’s a possible deal-breaker as the veto-wielding European Parliament has made clear the court must have a role in protecting the rights of EU citizens living in the U.K. after Brexit. May is ready to compromise, enraging some party members, but her offer may not go far enough for the...
Leer más

A tale of two economies

Imagen
There was something for everyone in yesterday’s U.K. economic data. For those who argue the British economy is proving Brexit-proof, unemployment fell to 4.4 percent, its lowest level since 1975. The pound rose in response. “Despite the scaremongering of the Remain campaign, businesses have confidence in the U.K. economy and are continuing to take on new staff,” said Change Britain Chair Gisela Stuart. For those who argue the economy is buckling as Brexit nears, the squeeze on U.K. consumers continued into the second quarter with basic wages rising 2.1 percent, lagging behind inflation. Productivity also fell. “Instead of the land of milk and honey promised by Brexiteers, we’re seeing falling wages,” said Liberal Democrat leader Vince Cable. Retail sales statistics scheduled for release today will provide further insight into the state of the economy. The challenge for Prime Minister Theresa May will be to ensure ongoing voter support for Brexit even if wag...
Leer más