Brexit Gets About as Ugly As it Can Get

Brexit Gets About as Ugly As it Can Get

European Council President Donald Tusk has spoken of a "special place in hell" as Prime Minister Theresa May arrives in Brussels for more talks

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How could Brexit get much worse? European Council President Donald Tusk, in a tweet after talks with Irish leader Leo Varadkar in Brussels, spoke of a "special place in hell" for "those who promoted Brexit without even a sketch of a plan of how to carry it out safely." Brexit-backing members of the UK Houses of Parliment reacted with anger to the comments, accusing Mr. Tusk of "arrogance" and the Prime Minister's representative asked of Mr. Tusk "whether he considers the use of that kind of language helpful". Ms. May, it should be noted, supported staying in the EU during the 2016 referendum campaigns. To her credit, her official spokesman said, however, "We had a robust and lively referendum campaign in this country. In what was the largest democratic exercise in our history, people voted to leave the EU."

So she charges on in what now seems like futile exercise. According to various reports, 85%-90% of the deal has been agreed upon, but the sticking point continues to be the Irish border. Both the EU and UK want to avoid the return of guard posts and checks, so something called "the backstop" was included in the deal. The backstop essentially keeps an open border between Ireland and the rest of the UK, but Ireland would still follow some of the EU rules.

May says if all goes as planned, it would never be used, but if it were, ending the backstop could only be done by the EU and this upsets hard-line Brexiters in Parliament. The March 29th deadline is fast approaching and it seems like negotiations will go down to the wire with the EU counting on an extension and Brexiters forming contingency plans for a hard Brexit" economic recovery plan. In the meantime, traders see increasing volatility in the British pound and should be aware that options may the only safe trade. 

 

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