Prime Minister Boris Johnson has just completed his first full rotation on the withdrawal agreement merry-go-round. And unfortunately for him and his Conservative Party, it doesn't look like he accomplished much, other than winding down the clock toward Oct. 31, the new - and some claim final - 'Brexit Day'.
To try and make some progress ahead of this weekend's G-7 Summit in Biarritz, Johnson embarked on a brief tour of the Continent this week, where he met with German Chancellor Angela Merkel, and embattled French President Emmanuel Macron, to discuss whether an alternative to the current withdrawal agreement might be found.
On Thursday, Johnson met with Macron, and the two delivered a joint statement in Paris, following an overly lengthy and incredibly awkward handshake between the two men.
The pound rallied after Macron sounded slightly more optimistic about a new withdrawal agreement, stoking hopes that a deal might be reached to avert a 'hard' or 'no deal' Brexit, something for which the market has been bracing for months,as Johnson has insisted - unlike his predecessor - that he will gladly lead the UK over the 'no deal' cliff if a deal isn't done before then.
But whatever cause for optimism that traders found in Macron's comments, it's doubtful that it will be maintained, as Macron pointed out that putting together a 'substantially different' withdrawal deal is doubtful. it's more likely that GBP is moving based on comparisons between the French government's comments from Wednesday vs. Macron's on Thursday.
"Let me be very clear: We will not find a new withdrawal agreement within 30 days which will be very different from the existing one," Macron said, before reiterating that Brexit "was not the choice of the European Union" and "we have to respect what was negotiated" under Theresa May.
The biggest snag, as it has been for the past ~2 years, is the Irish backstop, which is reviled by Conservatives who fear that the EU might use it to legally bind the UK to certain systems like the Customs Union. Both Macron and BoJo stuck to their guns this week: BoJo insisted that the EU must get rid of the backstop, something the bloc has repeatedly insisted it will never accept.
Macron claimed the backstop is a vital component of a deal.
"The Irish backstop (clauses) are not simply technical constraints but vital guarantees for the preservation of stability in Ireland and the integrity of the single market which is the basis of the European Project," Macron added.
But BoJo insisted that if the two sides tried hard enough, a compromise could be reached, even if the vaguely technological solutions outlined in a white paper put together by a group of conservative MPs have been repeatedly dismissed by the bloc. Critics inside and outside the UK have dismissed many of these options as "unicorns" - ideas that
"Where there's a will, there's a way," Johnson said.
Yesterday, Merkel suggested that a new deal might be reached if Johnson could find more realistic solutions, prompting Johnson to praise her "can-do spirit."
But as BBG pointed out, "while Merkel and Macron have been polite and offered encouraging words to Johnson, behind the smiles it’s clear they’re not prepared to change the fundamentals of the Brexit deal. That suggests that unless Johnson backs down, a no-deal departure still looks like the most likely scenario."
Meanwhile, Johnson is reportedly planning to join President Trump for breakfast on Sunday morning before the president heads back to Washington.
Then again, as we and others have pointed out, even if the Irish Backstop stays, the bloc's "insurance policy" is practically unenforceable. Both the UK and the Republic of Ireland have vowed to never reinstate physical barriers between Northern Ireland and the RoI, which is the only major land barrier between the EU and UK.