No Hope for Brexit

The latest round of negotiations brought no results.

Economic News
٢١ سبتمبر ٢٠١٨

This week brought difficult news for the United Kingdom. British Prime Minister Theresa May spent the past few weeks in a heavy battle with her government, trying to forge a plan for a Brexit deal, and after some positive remarks from the chief EU negotiator Michel Barnier several weeks ago, the British had hope that they would be close to securing a deal. However, at this week’s summit of EU leaders, this dream came crashing down and a no-deal Brexit seems more likely than ever.

Theresa May came to the summit with the so-called Chequers proposal, designed with her ministers earlier this summer. The draft proved hard to stomach even back in the United Kingdom and we saw several resignations from the Cabinet as a result from the proposal. The most important people in the European Union – Donald Tusk (President of the European Council), German Chancellor Angela Merkel, and French President Emmanuel Macron all criticized the Chequers proposal and the British demands in general. One of the most complicated aspects of the negotiations so far has been the fact that Britain wants to retain access to Europe’s single market, which is the largest one in the world, while Merkel and the rest see this is a key privilege reserves for members of the EU, and so refuse to let the United Kingdom benefit from it after leaving the bloc.

Another key problem that still remains unresolved has to do with Ireland. The Republic of Ireland is a member of the European Union, but Northern Ireland is part of the United Kingdom, so it will leave the bloc together with Great Britain. Yet the “two Irelands” have incredibly close ties and introducing a hard border between them, a division between EU and not-EU land, will be extremely problematic. Northern Ireland’s being part of the United Kingdom has always been a hot topic in the UK, much like Scotland’s status, though with a more militant history. Scotland had a referendum on whether to leave the UK just a couple of years ago, and even then the only saving grace that swayed voters in favor of staying put, was that the UK is a member of the European Union, thereby providing access to the EU for Scotland. But with leaving the bloc, Britain risks more political problems internal to the kingdom.

Since the official date when the United Kingdom has to leave the European Union is in March 2019, if there is going to be an agreement between the UK and the EU, it needs to happen now. The last month or two before the deadline will be necessary for dealing with the legislation pertinent to a Brexit deal, which means Theresa May needs to work quickly in order to get results from the negotiations right now.

There will be another meeting to deal with Brexit next month. Nevertheless, Donald Tusk stated that if there isn’t a concrete and feasible plan proposed by May’s government by then, it is likely that we would all witness a no-deal, hard Brexit. May has also stated that her cabinet is preparing for that eventuality as well.

SuperForex

Economic News

New Highs

SuperForex
٢١ سبتمبر ٢٠١٨

Economic News

Market Overview, September 20

The most important events today include a weakening of the dollar and a summit of EU leaders.

SuperForex
٢٠ سبتمبر ٢٠١٨

Economic News

Things to Know Today

SuperForex
٢٠ سبتمبر ٢٠١٨