Brexit Talks Resume This Week with Round 8

This week marks the start of a new round of negotiations as Brexit talks resume tomorrow. The three-day round of discussions covers areas like fisheries, energy, mobility, and social security, a swell as transportation.

It is a tough road ahead of the December 2020 deadline that will define the future EU-UK partnership. The two parties announced little or no advance recently, and many voices in the United Kingdom still call for a no-deal Brexit.

Brexit Talks Send the GBP Lower

The ongoing saga that started in 2016 poses immense challenges for both the E.U. and the U.K. Only if we refer to the Irish border issue, we have an idea of how difficult it is to find common ground.

I trust the British government to implement the Withdrawal Agreement, an obligation under international law & prerequisite for any future partnership. Protocol on Ireland/Northern Ireland is essential to protect peace and stability on the island & integrity of the single market.

— Ursula von der Leyen (@vonderleyen) September 7, 2020

In the meantime, support for Brexit vanes. Faced with the coronavirus crisis, the British people seemed to have lost interest in Brexit.

According to a recent poll, only 34% of Brits still want Brexit. The inability of the government to deliver on the Brexit promises makes people reluctant. For instance, one of the major slogans ahead of the Brexit referendum was that by voting to leave, the U.K. would save GBP350 million a week for the NHS.

Well, that money never arrived, so the NHS is suddenly short over GBP70 billion. It just shows the scale of the U.K.’s decision and the costs associated with it. The cost of Brexit so far is higher than all the payments the U.K. sent to the E.U. while it was a member.

Blaming Game Continues

This week’s Brexit talks start with the British pinpointing at the E.U.’s inflexibility on some of the matters on the negotiation table. But the market has a different opinion about that.

The Great Britain Pound (GBP) fell across the board since the markets opened on Monday. The GBPUSD trades about a hundred pips lower while the EURGBP recovered the lost ground and trades closer to the 0.9 level.

When the U.K. decided to leave the E.U., many considered that this is the end of the European project. Fast forward four years and the European Union issued new joint debt, started the E.U. Green Deal agenda, and has a Recovery Fund in place to deal with the economic recession created by the coronavirus pandemic.

But the U.K. leaving the E.U. remains a serious blowout to the European unity. It sends the wrong signal to the world – a world more polarized than ever.