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Tick-Tock Goes The Brexit Clock: The E.U. Gives Britain Two Weeks To Get Its Act Together

(Source: www.forbes.com)

It’s been 514 days since Britons voted to leave the European Union. A resulting parliamentary election has left the ruling Tory party vastly weakened. And six rounds of contentious talks with the E.U. over the rules of departure have made virtually no progress and left both sides increasingly frustrated.

On Friday, the E.U. drew its own line in the sand. Michel Barnier, the E.U.s chief Brexit negotiator, gave full vent to his frustration during a joint press conference with his harried and oft-maligned British counterpart, David Davis, setting a deadline of two weeks for a weakened Prime Minister Theresa May to prove her recent promise that Britain would make good on its budget commitments to the Union.

“This is absolutely vital if we are to achieve sufficient progress in December,” Barnier complained, demanding an “objective interpretation” of May’s pledge and “real and sincere progress” that has so far eluded both sides.

“If that’s not the case,” he warned, “then we will continue and that will pull back the opening of discussions on the future.”

He was referring to the E.U.’s insistence that no negotiations on post-E.U. trade and commerce ties, or a potential “soft-Brexit” transition, will be held until three key issues are first resolved, specifically the fate of three million E.U. citizens now living in the U.K. (and consequently that of 1.2 million Brits living on the E.U. continent), British agreement to pay what the E.U. sets as a €60+ billion price tag (or “divorce bill” as it’s widely known) and agreement on how to handle the critical border between northern Ireland and E.U. member state Ireland.

Yet, throughout the talks that began in June, Britain has argued that it won’t commit to anything without guarantees relating to its post-Brexit relationship with the E.U.

In other words, stalemate – although no one’s formally calling it that yet.

And that’s a situation Britain can ill afford. If there’s no progress by the time the European Council meets in December, not much will happen before the Council’s subsequent meeting in March 2018, with one full year of the two-year negotiating timeframe gone.

At that next meeting on December 14 and 15, E.U. leaders have to rule on whether negotiators have made “sufficient” progress on those three key issues.

It’s hard to overstate the stakes here. Free trade agreements, which Britain will have to undertake on multiple fronts, often take many years to hammer out. Most analysts already concluded that the challenge of meeting the two-year clock for an agreement that started ticking in March when May triggered the E.U. exit clause already would be at best extremely difficult and at worst impossible to meet.

And nobody can say what a post-Brexit future will look like if there’s no agreement by March 2019 when Britain is out. Key players in various industries, especially the critical finance sector, are either planning to leave, on their way out already or trying to split the difference somehow by maintaining a U.K. presence while expanding on the continent to ensure continued and uninterrupted operations.

Davis, who’s been a controversial and weakened figure at home, has continually called for “both sides to move together to seek solutions,” yet his government has been unable to craft a comprehensive, or comprehensible strategy for a successful end.

Meanwhile, May lost a battle in the House of Commons last week, forcing her to agree to make public 58 qualititative and quantitative “sectoral studies” examining the projected impacts of Brexit on various wings of the economy. Her ministers had fought to keep the studies under wraps, allegedly to reinforce their positions in the E.U. talks.

In another sign of the government’s current weakness, the Tories were outmaneuvered by the opposition Labor Party, which forced a motion through the parliament that will see the studies released in about three weeks.

The secret studies have been an ongoing embarrassment to the government in recent months. Even Davis’s former chief of staff, James Chapman, asked in a tweet why the government was keeping them under wraps given their import to the country. “Why won’t (the Department for Exiting the European Union) publish its analysis of impact of hard Brexit on 50+ sectors?” he asked. “Could it be concerned it might put voters off the whole idea?”

It should be concerned about that very point. Many observers believe that the fact that these studies, along with several others, haven’t been completed until now shows the government’s fear that once made public they could work against the case for Brexit.

And recent polls indicate that a new Brexit referendum could well find a reversal in the unexpected and stunning 52%-48% 2016 vote to leave the E.U.

 

More Info: www.forbes.com

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