A look at Brexit so far ahead of Mrs May, her speech and her handbag full of cash
Sterling rallied recently against the USD story and some limited but slightly better news on the economy which is slowing but still resilient. Little, if any progress thus far in Brexit talks is evident. The lack of progress can be attributed to both sides in all fairness as the legal aspects surrounding the Treaties and 40+ years of complicated agreements involved, must be disentangled and new agreements put in place to ensure a smooth transition from full membership of the UK to some kind of mutually beneficial new order in Europe- wide.
Where are we so far in the actual negotiations?
The 4th round of negotiations is scheduled for October. Critical, refer below.
Both sides agreed that talks should have 2 main phases. firstly, the legal agreements for actual withdrawal including the divorce bill, the border issues for Northern Ireland and ex-pats rights on both sides.
During the 1st 3 rounds in phase 1, serious differences surround the European Court of Justice and EU citizens rights whilst living in the UK. Issues surrounding UK citizens living and working in the EU remain unresolved, although one un-named official said “there was light at the end of the tunnel”
The divorce bill is not agreed and both sides seem a world apart on how to agree upon it, let alone how much. Step up Mrs May, handbag, glad rags and all.
Some outline progress has been made on the Northern Ireland border issues but still very little and besides, that is a political hot potato with so many agreements to deal with involving political divides and business interests both sides of the border, not to mention the complication that no formal power sharing government is in place at Stormont. Northern Ireland Assembly.
Not very much in substance. Absolutely nothing agreed as such.
Where we should be by round 3 end: The first round of talks was to agree on how often they meet to achieve the goals set out. That has all but been scrapped and already a new arrangement is being discussed to intensify and speed up talks because of the lack of progress.
The EU had always insisted that the second phase should only begin upon a final agreement(s) on phase one but has since relaxed its stance leading to more confusion, saying that phase two could begin once enough progress had been made on the withdrawal negotiations. The UK, keen to start the two negotiations in parallel, agreed to that change but still after round three is now finished, no real results that the business community and therefore markets can react to.
Thus far, there have been no compromises or trade-offs. Both of which would signal progress. In some areas mentioned above, it is difficult to see how compromises can be made, let alone trade-offs. The obvious area is citizens rights. UK and EU citizens should surely be the number one consideration for full agreements, compromises and trade-offs. Instead it appears they are just pawns in a political mire and live with uncertainties. Are we a third world Europe? Slipping into defence of human rights here.
We can see agreement on some kind of transition deal with many complexities, but if the European Council at their meeting on October 19th and 20th decide that insufficient progress has not been made on withdrawal issues, negotiations cannot likely proceed until the following Council meeting December 14th and 15th, adding more uncertainty to the talks generally and for business and markets. Dates to keep in your diaries.
just 2 key quotes that go some way to sum proceedings up, so far:
First from Stefan Leifert, a correspondent from German broadcaster ZDF “Perceptions about the achievements so far are also far apart. EU chief negotiator Michel Barnier says they are “far from real progress”, while his British counterpart, Brexit minister David Davis, speaks of “very productive negotiating days”. Welcome to the parallel universe.
Meanwhile and for at least some balance, this quote from the Economist’s Tom Nuttall who said “The EU blames domestic politics for stopping the British from being clearer about what they want. And negotiators were dismayed to see Theresa May, the prime minister, return this week to her mantra that “no deal is better than a bad deal”. Next month she is to deliver a speech on Brexit. If she says the same thing, says one Eurocrat, the talks will be set back by six months”
Upon which we move on to today’s handbags and glad rags speech by Mrs May. She may be arguably one of the most glamourous and best dressed leaders in the World today. Can she move markets? Short answer is yes, she can and probably will.
From this juncture, we can update ourselves on Brexit, its market moving progress and failures if someone wants to take up the mantra. I wanted to insert a few pictures of the main protagonists but couldn’t glue them on. Have fun trading this one folks.
Mrs May’s speech is due around 13.30 GMT
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