Several papers and media outlets this morning are reporting that Prime Minister Theresa May has scheduled in an important political announcement on Tuesday, with many speculating that this will be the formal triggering or Article 50, starting the official withdrawal process from the European Union.
There is speculation that the Government will overturn the two amendments to the Article 50 Bill, which the Lords recommended last week. These were that the Government had to have a final “meaningful” vote on the deal that is expected to be presented to Parliament before we leave. And that the UK Government should guarantee the right of EU citizens already living in the UK.
It is reported that the Government feels confident of overturning these two amendments, with the PM wanting the same assurances from the EU about British citizens living inside the EU.
It is also reported that a meeting has been scheduled for April 6th for the EU27 to respond to May’s announcement for this Tuesday.
Could this finally be the trigger for leaving the Union, nearly 9 months after the result?
Trigger this week
The timings seem appropriate. On Monday Parliament will begin debating on the amendments with a view to cancel the amendments imposed by the House of Lords, which they can do. The aim here will be to get this done as quickly as possible, hand it back to the Lords where it is expected they will allow the Bill to pass unimpeded, giving Theresa May the power to trigger Article 50.
It does seem that it has to be Tuesday due to a busy period of upcoming events. On March 15th there are Dutch elections, where anti-EU Geert Wilders still holds an advantage over there. May would avoid the 15th for this reason. The SNP have their conference in March 17th and 18th. She won’t want to clash with this either. Finally, there is an EU celebration in Rome on March 25th. Certainly no clashing wants to be done then either.
It seems that if May wants to trigger Article 50 by her self-imposed deadline, it has to be Tuesday.
Will there be a market reaction?
In theory, much of the pricing in should already be done. The world has known for a long time now that we’re leaving the EU, and should have already priced in what they needed to.
Still, I would expect some kind of macro-movement on triggering day, as no response at all seems unlikely. The thing that will move markets, and crucially for the glazing industry the currency markets, is when and how the EU will respond.
It’s been reported that EU top brass will publish a formal response 48 hours after the triggering of Article 50, with a meeting scheduled for April 6th to put together a framework of how the negotiations will work.
Back here, we can expect the Brexit machinery to really step up a gear. We can assume that quietly in the background preparations and plans have already been made in various departments. With the clock now ticking, presumably from Tuesday, those plans and preparations will be put into place. From then, and for the next two or so years, we can expect the most intense political activity in this country and around Europe we have seen in decades.
I think during the next two years, especially in the early months of negotiations, it will be important to take a wider view on things. There will be flurries of rumours, reports and counter to that. It’s going to be that sort of environment.
Because of that, we could see quite violent swings up and down of markets and currencies. It will be important to not get too carried away with any of that. We’re playing the long game, and the end result is all that will matter.
There are though some hints of what both parties want from the talks. The EU’s chief negotiator has just said that he would like UK citizens to retain some of the EU privileges, with a view to travel. A positive sign from the EU to the UK, but what that will cost us will remain to be seen. The EU is also wanting special measures for finance in London, wanting banker to retain some kind of “passporting” scheme which they currently have already, to ensure they can still have quality access to the most important financial capital of the world, which is still London. We can assume that very quickly both parties will agree to guaranteeing the rights of each others citizens currently living here and in the EU. That’s assuming both parties do the morally right thing from the get go.
By the end of the two years, we will either have a transitional deal or a proper one. I refuse to believe that both parties will walk away from any deal altogether. There is much to close between us all if things go sour, and for all our differences, it is in all our interests to continue to work productively together. For that reason, I believe we can honestly construct a new partnership which satisfies those here and abroad. But with huge political turmoil possible in the Netherlands, France and Germany all this year, it could be a rocky road ahead.
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