Brexit Moves To Phase 2 - Sterling Slides As EU Warns Talks Will Be Far More Testing

Following the humiliation of losing the House of Commons vote on Friday, in which MP’s took the final say on the Brexit deal from the executive, UK Prime Minister was in Brussels as EU leaders gave approval for Brexit talks to move to phase 2. At a dinner last night, she was applauded by leaders of the other 27 EU nations after giving a speech. This morning, the European Council approved the recommendation from the European Commission that talks should proceed to the next phase. Donald Tusk, President of the European Council, tweeted the news.



From the FT “EU leaders have confirmed that “sufficient progress” has been made in the first phase of Britain’s Brexit talks, giving a boost to Theresa May, the UK prime minister, and paving the way for crucial discussions next year on trade. In a summit in Brussels on Friday the EU’s 27 other member states endorsed the European Commission’s recommendation that London had given enough guarantees on the most important divorce issues for talks to begin on a future relationship. The three issues were the UK’s Brexit bill, the rights of EU citizens and the Northern Irish border.

Mrs May was not in the room when her fellow heads of government quickly signed off on the end of phase one talks. They had applauded her on Thursday night to mark the end of several months of fraught negotiations on the divorce. Friday’s declaration was widely expected after Mrs May secured an agreement last week with Jean-Claude Juncker, commission president. That agreement came after the British prime minister assuaged the concerns of Northern Ireland’s Democratic Unionist party over the Irish border; Mrs May relies on DUP support in the UK’s parliament.

The pound fell on the news, as traders focused on the tough negotiations ahead on trade (see below). According to Bloomberg.

Pound Falls to Day’s Low After EU Agreement on Brexit Progress

 

Pound falls as much as 0.5 percent to $1.3363 following agreement among EU leaders to move on to the more challenging phase two of Brexit negotiations, according to Neil Jones, a strategist at Mizuho in London.

 

There’s a “good chance now the first phase is done and dealt with, the market will now turn to tougher negotiations ahead,” he says in emailed comments



While the discussion about moving into phase 2 talks of Brexit has always focused on the future trade agreement, the first subject of discussion will be the terms of the UK’s transition phase. This is set to last two years during which the UK will not have a vote on EU proposals but will still have to abide by EU laws and regulations. After Britain sets out what it wants from the future trade relationship, formal discussions on this will begin in March 2018 and, it’s hoped, will be concluded by Autumn next year. The UK parliament can vote on the agreement by the end of next year. The FT notes comments from Malta’s leader.

Joseph Muscat, Malta’s prime minister, said on Friday that the “first big step is for the UK to say what it really wants in clear terms” on its relationship with the EU. “If this happens in the next few weeks then by March we will have a very clear position,” Mr Muscat said. “We are totally committed from our side to deliver.”

Five UK business groups - the British Chambers of Commerce, Confederation of British Industry, EEF (manufacturers’ organisation), Federation of Small Businesses and the Institute of Directors – welcomed the progression to phase 2. However, they warned the UK government that a transition deal needed to be agreed as soon as possible, so business can prepare for Brexit.

We welcome the fact that the European Council has approved the progression of talks to the discussion of a transition period, and a future trade relationship.

 

It is our collective view that the transition period must now be agreed as soon as possible, to give businesses in every region and nation of the UK time to prepare for the future relationship. Further delays to discussions on an EU-UK trade deal could have damaging consequences for business investment and trade, as firms in 2018 review their investment plans and strategies.

 

While our members will be particularly pleased that EU citizens currently living and working in the UK now have more clarity, it’s still essential that an unequivocal commitment on their future rights is made whatever the outcome of negotiations.

 

We will continue to work with the government to ensure that UK firms can overcome the challenges and take advantage of the opportunities that a new trading relationship with the EU and the rest of the world will bring.

While the negotiations over the divorce settlement were often tortuous, as the EU was determined to extract its “pound of flesh” from UK citizens, Donald Tusk noted last night that trade negotiations might be even more challenging.

Donald Tusk, president of the European Council, had said on Thursday that leaders would certainly confirm that “sufficient progress” had been made but that the next phase of talks would prove far more testing. The talks up to now have “demanded courage, realism but — above all — our unity,” he said.

The Telegraph published this timetable for Brexit negotiations, coutesy of the Press Association.

2017

December 19 - The Cabinet will discuss what sort of long-term relationship they want Britain to have with the EU after it has withdrawn from the bloc.
December 20 - Ministers face the prospect of a second Commons rebellion on the EU (Withdrawal) Bill over plans to write the Brexit date into law.

2018
Winter/spring - Negotiations on the transition to future EU/UK relations, along with "exploratory talks" on a possible free trade agreement.
March 22-23 - European Council summit in Brussels. An opportunity to assess what kind of trade deal can be expected.
May - English local government elections will provide the Prime Minister Theresa May with her first widespread electoral test since the disastrous snap election of June 8 2017.
October - A final treaty on withdrawal and transition should be ready by this point in order to allow time for ratification before the end of the two-year Article 50 deadline. EU chief negotiator Michel Barnier says that it is only at this stage that the "real negotiation" on a free trade deal will begin, and that the parties will be "hard pressed for time" to conclude this before the March 2019 date of Brexit.

2019
Winter/spring - Ratification process involving as many as 38 national and regional parliaments, with any of them effectively holding a veto.
Brexit Secretary David Davis has promised that Parliament will have to approve any deal in a Withdrawal Agreement and Implementation Bill, although this will be on a "take it or leave it" basis. MPs will consider the legislation before MEPs in the European Parliament carry out the final vote on any agreement.
March 29 - Two years after the invocation of Article 50, the UK ceases to be a member of the EU and is no longer subject to its treaties, whether or not a withdrawal agreement has been reached. Because the exact moment of exit is midnight Brussels time, the UK is due to leave at 11pm on March 29. Under the terms of the EU (Withdrawal) Bill, the bulk of Brussels legislation would be automatically transposed on to the UK statute book.
June - European Parliament elections will take place without the UK.

2020
December 31 - Britain ceases payments into the EU budget.

2021
If a two-year "implementation period" is agreed, Britain will finally move to its new relationship with the EU in the spring of 2021, ceasing to observe EU rules and regulations.

2027
Expected end of the European Court of Justice's role in the oversight of the rights of EU citizens living in the UK.

 

Comments

ConfederateH Ghordius Fri, 12/15/2017 - 09:13 Permalink

See how grabby the EU already is?  Already trying to provoke a crisis between England and Ireland and pry little worthless pieces of land off of Northern Ireland, and Brexit is still in deep freeze.Just wait until Ghordius has his Imperial EU Army to stir up problems in Catalonia, Tyrol or Bavaria.  They will call him "Il Duce".

In reply to by Ghordius

Ghordius ConfederateH Fri, 12/15/2017 - 09:29 Permalink

"little worthless pieces of land off of NI"

go there and say that aloud. I dare you

nope, it was the Very British DUP Party (NI) that was a recent thorn in PM May's side, my dear

Arlene, their leader, was a teenager in a bus that got attacked by terrorists fighting about those "worthless pieces of land". she might give you a special piece of her mind, if you do

In reply to by ConfederateH

GreatUncle Ghordius Fri, 12/15/2017 - 11:04 Permalink

Bullshit Ghordius ... ask Northern Ireland, Ireland has no claim on Northern Ireland it is for Northern Ireland to decide.Let Northern Ireland have a referendum to decide where they want their border to be, across the land or on the ferries or just maybe they would like to become part of Ireland again.That has nothing to do with the UK or Ireland or the EU come to that.  

In reply to by Ghordius

desirdavenir ConfederateH Fri, 12/15/2017 - 10:03 Permalink

I note you still haven't responded to a simple question: if something in GB must be different (by the will of brexiters) of something in Republic of Ireland (whose citizens want to remain in EU, or at least haven't voted to leave EU), should:- Northern Ireland be the same as the GB, because it belongs to the UK- Northern Ireland be the same as the Republic of Ireland, because of Good Friday's agreements and the no land border rule Or is it that you see another solution ? If so, please explain.  

In reply to by ConfederateH

ConfederateH desirdavenir Fri, 12/15/2017 - 10:31 Permalink

This is Irelands problem.  It is debatable if even England should be involved, especially since it has turned in to a christian hating moslem country anyway.  Why do they care about Northern Ireland, since clearly they despise anglicanism.But then again, why does the Republic of Ireland care either.  They have allowed themselves be ass raped by queers and feminists. Gay Marriage, abortion, miscegenation, you name it. Hell is the limit.  Ireland is a Catholic country?  Its closer to Gommorah.

In reply to by desirdavenir

kellys_eye ConfederateH Fri, 12/15/2017 - 10:17 Permalink

The EU are shit scared that an open border will simply expose the massive differences (i.e. advantages) Northern Ireland will have over the Republic.  Equally, the poor Irish will be looking with envy towards their Northern neighbors and divisions between Ireland and the EU will start to rise as a result.The EU would be happier building a wall across Ireland to keep their 'slaves' enclosed in the system that is going to drain them of everything they aspire to - just as happened in East/West Germany.How long before Irish residents are shot at for trying to 'escape' to Northern Ireland - the land that will be free and prosperous after Brexit?Comparisons between the EU and Communism aren't just jokes - they have a basis in fact.

In reply to by ConfederateH

ConfederateH American Psycho Fri, 12/15/2017 - 08:43 Permalink

England is like Lybia.  Both are totally destroyed and can no longer resist ZOG.  But so too are they too difficult to get anything accomplished with.  So both of them are like half dead carcasses hanging from the hunters neck while he focusses on other prey.  Eventually his attention will turn back, and it won't be fun.  England is going to be tormented for having the audacity to screw the hunter's plans up. 

In reply to by American Psycho

Ghordius BadKiTTy Fri, 12/15/2017 - 08:57 Permalink

that was a EU Council meeting

it's the leaders (aka Prime Ministers) of those "others" in the "gulag"

every and each of them recallable anytime by their Sovereign Masters, the elected National Parliaments, which can, with the force of Law, instruct them how to vote on any issue they choose

example: the British Parliament just instructed PM May to give them the final deal for scrutiny/vote

(vaguely comparable to the US Senate before 1913, where State legislators instructed their recallable appointed Senators how to vote)

In reply to by BadKiTTy

BarkingCat Ghordius Fri, 12/15/2017 - 09:02 Permalink

And how many of them are cheap political whores willing to sell out they countries for a few pieces of silver? How many Tusks are there amongst those prime ministers? You know the guy who sold out his country and ended up with a job in the EU itself.How many are drunker than Junker?

In reply to by Ghordius

Ghordius BarkingCat Fri, 12/15/2017 - 09:16 Permalink

one of them is the newly appointed PM of Poland. by a majority in the elected Polish Parliament, the same majority led by those who accuse Tusk of so many things, including a plane crash that killed parts of the former government

you mean him? watch his votes in the EU Council

Parliament(s) appoint what they want, for Prime Minister. it's their prerogative. formerly, they appointed Tusk as PM. accept that as a Fact, because it is

Tusk, btw, has no Vote in the EU Council. that role of "prez" is more of a secretary. and yes, the EU "recycles" former national leaders, particularly PMs. Barroso, former PM of Portugal, became Commissioner and now he works for a private industry... and that last move was seen as "prostituting" by many

In reply to by BarkingCat

kellys_eye BarkingCat Fri, 12/15/2017 - 10:24 Permalink

So true.Cameron threw himself on his sword in the full knowledge that the next Tory leader would be free to shed their responsibility to Britain and its interests by subverting the Brexit process.  PMT May is a 'remainer' and has been walked all over (rather has laid down and spread her legs) by the EU.After Phase 1 was announced as a 'success' May talked of 'give and take' and Junker talked of 'concessions made' but I defy anyone to tell me what concessions and what form any give/take looked like.  It seems that May simply GAVE and Junker TOOK.  Pathetic.The EU are fucked if the UK leaves the game and takes its ball with them.  WE all know this and the UK Government knows it too so God alone knows why WE are on the back foot.  Anyone with any negotiating sense whatsoever would have the EU coming at us with a begging bowl and on bended knee.  The EU is full of shits and the UK Government is led by such.   

In reply to by BarkingCat

Ghordius Fri, 12/15/2017 - 08:45 Permalink

"Muscat, Malta’s prime minister, said on Friday that the “first big step is for the UK to say what it really wants in clear terms"

says it all

BarkingCat Ghordius Fri, 12/15/2017 - 09:46 Permalink

My post was in reference to his misuse of the apostrophe, which really indicated that something belonging to euro.Yes, I am a grammar nazi, although I have been very restrained lately, because many people dictate their posts and Google and Apple can grammatically destroy a sentence in more ways than one could imagine.

In reply to by Ghordius

Mimir Fri, 12/15/2017 - 09:29 Permalink

Brexit moves to the second phase, but before then there is the need for formalising the "gentleman agreement" on: the Irish Border (no hard border); EU citizens rights and the "divorce bill".As Juncker is qouted having said this morming: "He said that the Withdrawal Agreement now needed to be formalised and placed before the European Parliament, adding: "Then, we will start negotiations on future relations as soon as possible." 

Atomizer Ghordius Fri, 12/15/2017 - 09:52 Permalink

Sure, but I have many high ranking friends in Parliament. That London Muslim wanker is shipping in guns. Have nice chats with my friends over the pond. Mays is incompatible of running Parliament. Everyone is aware, except you as European Union gravy train horder for someone's money to prop up you. Not picking on you individually. Simply fact.  Would you like me to provide the World Bank and IMF forecast for 2018? Q1?

In reply to by Ghordius

Atomizer Ghordius Fri, 12/15/2017 - 10:07 Permalink

You have been here a long time with ZH. We butt heads on your Eurotrash symbol. I respect your points, just never agree. Wife and I are Capitalist. Your a socialist or Marxist. That's why we have guns in United States. Our firewall will never allow you to take over. You can find another country to fleece wealth to support your mission. Parisite's sucking welfare status to divide and separate. 

In reply to by Ghordius