The ‘fog of Brexit’ creates tensions as UK economy eyes no-deal split
Theresa May has been told that 27 partner countries will not renegotiate the Brexit divorce but Britain could ‘crash out’ with no follow-on trade arrangements.
The ‘fog of Brexit’ creates tensions as UK economy eyes no-deal split
Theresa May has been told that 27 partner countries will not renegotiate the Brexit divorce but Britain could ‘crash out’ with no follow-on trade arrangements.
European Union leader Jean-Claude Juncker and Prime Minister Theresa May agreed on Thursday to hold further talks on Britain’s withdrawal from the bloc, after what they described as a “robust” meeting.
EU negotiator Michel Barnier will meet Britain’s Brexit Minister Stephen Barclay on Monday in Strasbourg and May and Juncker themselves will get back together before the end of February, a spokesman said.
In a joint statement issued after Prime Minister May met Juncker at EU headquarters in Brussels, the pair confirmed that the European Commission president had warned the British premier that the Brexit withdrawal deal cannot be renegotiated.
But he “expressed his openness to add wording” to a parallel political declaration laying out ambitions for future EU-UK ties if London wants to seek a “more ambitious” closer relationship after Brexit.
May, however, urged that the withdrawal agreement itself be changed, and reminded Juncker that the British parliament had mandated her to seek “a legally binding change to the terms of the backstop.”
This is a clause in the withdrawal agreement, signed last November, that would keep Britain in the EU customs union even after a post-Brexit transition period if no way is found to keep the Irish border open.
The discussion was robust but constructive,” the joint statement said. “Despite the challenges, the two leaders agreed that their teams should hold talks as to whether a way through can be found that would gain the broadest possible support in the UK parliament and respect the guidelines agreed by the European Council.”
If no agreement is reached on the withdrawal deal, which has yet to be approved by either the British or EU parliaments, Britain will “crash out” of the union with no follow-on trade arrangements on March 29.
Describing the approximately 90-minute meeting between Juncker and May as “robust but constructive,” Juncker spokesman Margaritis Schinas said that the EU and Britain have already “made significant concessions to get a deal.”
May and Juncker are due to meet again before the end of the month.
It comes as Bank of England Governor Mark Carney is warning that the “fog of Brexit” is creating “a series of tensions” in the British economy.
In a news conference after the bank kept its main interest rate unchanged at 0.75 per cent, Carney said it is likely that uncertainties “remain elevated for a while and that financial conditions stay tighter for longer.”
Although many companies have stepped up preparations for the possibility that Britain might crash out of the European Union on March 29 without a deal, Carney said the economy as a whole “is still not yet prepared for no deal, no transition exit.”
He said half the businesses surveyed by the Bank of England are “not ready for such a possibility” and that “on balance respondents expect UK output, employment and investment to contract substantially if it were to occur.”
The pound dropped after the Bank of England slashed its forecasts for the British economy amid growing uncertainties over Britain’s exit from the European Union and weaker global growth.
https://www.news.com.au/world/europe/the-fog-of-brexit-creates-tensions-as-uk-economy-eyes-nodeal-split/news-story/56b16cdb9772565349262d700c09f1ce