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Brexit Bulletin: A sense of gloom
Published by
Bloomberg

5m read

11 January 11.03am

Hargreaves Lansdown is not responsible for this article's content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest. Article originally published by Bloomberg.

Today in Brexit: While the stormy Brexit debate continues in London, the EU is quietly - but anxiously - getting on with the job.

Away from the chaotic scenes in Westminster, the Brexit truck rolls on in Brussels, where officials look down their noses at how messy British politics seem to be making the U.K.’s departure.

Diplomats wonder aloud about what a massive House of Commons defeat will do to the deal struck between Prime Minister Theresa May and the European Union. Many think an extension of the U.K.’s negotiating period beyond March 29 is now inevitable. But these are the same officials who have proved themselves notoriously bad at reading British politics over the past few years. Nonetheless, they talk openly about July as being the real possible end-date - just before the new European Parliament sits, after elections in May. But they acknowledge that estimate isn’t based on anything they’ve heard from the British side.

Ask a Eurocrat about the events in U.K. politics this week and you’re met with bemusement, weariness and a lecture on why it’s essential to have a written constitution. As rowdy British lawmakers rant and shout, the EU quietly set in motion its own ratification process this week. Ambassadors from the remaining 27 member states met on Wednesday to launch the bloc’s “written procedure” - the official approval of the Brexit deal to be sent to the European Parliament ready for it to give its consent if and when the U.K. does.

EU officials lament the amount of time that’s being wasted. By now they should have been preparing the start of the full-blown U.K.-EU trade negotiations, ready to begin the day after the U.K. leaves. Instead, as well as still dealing with the ratification process of an agreement that might never be ratified (and considering how best to send “reassurances” to the U.K. to help May win her vote), their time is spent on the 14 pieces of legislation that form their no-deal contingency plans. Even if May’s deal is ultimately approved, this all means that the next stage of Brexit is already behind schedule.

After two years of work, a sense of gloom has enveloped Brexit officials on both sides in recent weeks. While the Europeans are frustrated, British civil servants in Brussels are depressed that their efforts may have been for nothing. Some are already making a start on the U.K.’s preparations for the full trade negotiations with the EU after Brexit, not knowing whether this will ever see the light of day either.

Brexit in Brief

The View From Japan | With May’s plan facing likely defeat in Parliament next week, Japan’s Prime Minister Shinzo Abe told Theresa May the whole world wants to avoid a no-deal Brexit. In London on Thursday, Abe publicly backed May’s agreement and offered her his “deepest respect” for the work she has done.

What Next | The implications of a turbulent week in the Commons are becoming clearer. According to a government official, the prime minister will now need to put forward a new motion for debate setting out the government’s next steps within three days of losing Tuesday’s vote. In theory no vote would be required quickly, but in reality May is likely to call a vote on it in the Commons within a week, the official said.

Corbyn’s Plan | Labour leader Jeremy Corbyn said in a speech in Wakefield his party is not ruling out extending the Article 50 Brexit period beyond March if it came to power. He repeated his hope for a general election if May’s deal falls, which his party would fight on a manifesto promise for a negotiated Brexit. That’s likely to disappoint Labour Party members seeking a firmer commitment to a second referendum or even opting to remain in the bloc.

Growth Stopped | Terms of an agreement between Britain and the EU that seeks to ensure flights continue even after a hard Brexit don’t allow for growth, an industry group warned. The accord is pegged to 2018 figures and could stifle expansion if demand gains even after a no-deal split, IATA CEO Alexandre de Juniac said on Thursday in Dubai.

Looser Role | Money managers scored another point in their drive to prevent EU regulators from gaining more control over their operations after Brexit. The European Parliament’s Economic and Monetary Affairs Committee endorsed a watered-down bill giving regulators a limited role to make recommendations on the oversight of firms.

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Storing Up Tesco Plc has remained quiet on Brexit ever since the referendum result, but the U.K.’s biggest retailer now says it is planning to stockpile in the run-up to the March deadline. The supermarket has delivered stock-holding and production plans for each of its suppliers by using existing networks and warehousing space. It has offered to help these suppliers hold their stock if they lack the space to do so themselves.

This article was written by Ian Wishart from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Article originally published by Bloomberg. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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