Brexit crunch time for Theresa May
EU leaders won’t decide to talk future trade until December. Theresa May will have to decide before then which Brexit path she’ll take Britain. Will it be deal or no deal?
EU leaders are in Brussels today and tomorrow for an EU summit. Issues on the agenda include migration, defence, foreign affairs and digitalsation. At the start of Brexit talks, it had also been hoped the summit would see the remaining 27 EU leaders agree that “sufficient progress” had been made on withdrawal issues for talks to move onto the future UK-EU relationship. But we now know that will not happen. As the EU’s chief Brexit negotiator noted at the end of the fifth round of talks, negotiations are in “a state of deadlock” over money.
And as we noted in the above article, it seems the problem is that the UK government is still not ready to make a decision over it. This could be because ministers themselves do not agree yet on what they are willing to put forward. The Brexit secretary David Davis also appeared to suggest this in an interview to German newspaper Die Welt.
The Telegraph’s Peter Foster tweeted the deadlock was in London rather than in Brussels:
— Peter Foster (@pmdfoster) 19 October 2017
Of course, it could also be that the prime minister doesn’t want to make the commitments necessary without being sure of some kind of trade deal. Perhaps it’s a little of both.
However, whilst the EU will not yet agree that talks can move onto future trade, they are set to agree to start internal preparatory talks on future trade at the summit. They will also agree to reassess the situation at their next summit in December.
So the next few months really will be crunch time for the UK. With her party still in disarray over the next steps, the prime minister will have to decide whether to go along with those pushing for the UK to start preparing now for ‘no deal’ or those advocating for a deal that will avoid (or at least delay) the cliff edge.
Economic data published this week (inflation at a five-year high, falling real wages and a sharp fall in retail sales growth) suggests the UK economy is already suffering from Brexit uncertainty. And businesses are already holding off investment decisions as a result. Soon, they will have to make a decision about whether to activate contingency plans that could see them move operations from the UK. Indeed, some already are. Here’s a tweet from Goldman Sachs chief executive Lloyd Blankfein saying he will be spending a lot more time in Frankfurt because of Brexit.
Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there. #Brexit
— Lloyd Blankfein (@lloydblankfein) 19 October 2017