EU Blinks – Brexit deal on the table

By TruePublica: Sterling rallied by more than a per cent to cross the $1.30 line for the first time in weeks on Wednesday after the European Union’s chief Brexit negotiator signalled a much more accommodating position towards the United Kingdom in ongoing talks strongly implying a Brexit deal is on the table.

 

It appears that publicly preparing Britain for a no-deal Brexit has called the EU negotiators bluff and it looks like it might just work. Geopolitical tensions between the USA and EU have also played their part and for the first time in many months, Theresa May could confound everyone if she pulls it off.

With a no-deal Brexit the EU would have lost 13 per cent of its population and 16 per cent of its GDP overnight and sent the precarious 27 nation bloc plummeting back into recession. In addition, the EU is negotiating tricky trade tariffs with the USA and would rather retain the UK as a solid partner than lose it to the USA, which would make matters considerably worse for itself. Trump, for all his shenanigans and bluster, could be helping Britain get a better Brexit deal.

 

The EU seems now to be prepared to offer a post-Brexit deal with the U.K. that is unlike anything it has struck with any country outside the bloc, chief negotiator Michel Barnier said Wednesday (30/08), leading to a 0.9 per cent jump in the value of sterling against the dollar within hours. Confidence in Sterling is a strong indicator that there is more confidence in Britain’s position going forward.

“We are prepared to offer Britain a partnership such as there has never been with any other third country,” Barnier told reporters in Berlin, following a meeting with German Foreign Minister Heiko Maas, Reuters reported.

“We respect Britain’s red lines scrupulously. In return, they must respect what we are,” he said. “Single market means single market … There is no single market à la carte.”

From a position where the tables look to have turned slightly in favour of Britain, Theresa May’s unofficial Brexit minister David Lidington, who coordinates Cabinet activity around leaving the EU, said the UK would only accept the Chequers deal or a no-deal. In his language, it is obvious that Lidington is using both the EU and USA as leverage against each other.

“With exactly seven months until the end of the article 50 process and less than two months ahead of the October European Council, we face the choice between the pragmatic proposals we are discussing now with the European Commission or no deal,” he told French business leaders in a speech on Wednesday.

“I truly feel that we are at a fork in the road. There are trends on both sides of the Channel, both sides of the North Sea, and both sides of the Atlantic that could see us drift apart.”

Theresa May’s Chequers proposal, which Mr Barnier has completely ruled out, asks for frictionless trade based on access to the single market for goods through a “common rulebook”, as well as no customs checks through a bespoke customs system.

Barnier has also raised concerns that the plan for a single market only for goods would give an undue “significant competitive advantage” to Britain at the EU’s expense. However, the EU still cannot afford to push Britain into the arms of America with a no-deal Brexit.

The clock is ticking but for the first time since the EU referendum, it looks like Britain has a plan.

 

 

---