The EU has a simple message on the Brexit deal: Like it or lump it


Jean-Claude Juncker has described the prime minister as “nebulous and imprecise” as she tries to seek assurances on the backstop.

Mr Juncker has called Theresa May a woman of 'great courage'
Image:Mr Juncker has called Theresa May a woman of ‘great courage’

‘You called me nebulous!’: Theresa May angrily confronts Jean-Claude Juncker

Sky News
Brexit blow for Theresa May as EU leaders say there will be no renegotiation

Sky NewsBrexit blow for Theresa May as EU leaders say there will be no renegotiation

Dominic Waghorn, Diplomatic editor, Sky News|AIWA! NO!|There was plenty of distracting detail in this summit.

A spat about the word “nebulous” and a tense Juncker-May encounter played out for the cameras.

But in terms of substance? This summit added up to one simple message from the EU: The deal is the deal.

It is what it is.

Like it or lump it and accept the consequences.

May came here hoping to be thrown a bone – some diplomatic slack she could take home with her to persuade MPs to drag her deal across the line.

Video:Watch: May and Juncker face off in Brussels

There was, according to some reports, a draft conclusion agreed between the EU and the UK giving the PM some politically comforting words.

They would have included a promise to carry on working towards assurances on the agreement.

And there would be an acknowledgement that no one believes the use of the Irish border backstop is a “desirable outcome”.

But those lines, innocuous as they were, were ripped out, according to some reports because the Dutch, French and Belgians feared they would only encourage the Brexiteers to ask for more.

Video:May on ‘robust’ discussion with Juncker

Others claim the final conclusions were hardened because the prime minister did an appalling job persuading European leaders she had a plan to get them all out of the unholy mess they are all now in.

But whatever the details, the outcome of this summit remains the same.

The withdrawal agreement will not be renegotiated.

Work will go on towards seeking assurances about the backstop, but it will be cosmetic.

By day’s end there were warm words from Mr Juncker and the President of the European Council Donald Tusk.

At the closing press conference they paid tribute to the prime minister’s courage and said they remained at her disposal.

But they were sugaring the pill.

Theresa May and Jean-Claude Juncker at the summit in Brussels
Image:Mrs May and Jean-Claude Juncker at the summit in Brussels

Mrs May goes home with nothing substantial to show for her mad dash around Europe.

At some point soon probably next month, she may have to say: “I have run out of options, here is the deal, hold your noses and vote for it, or risk losing everything.”

That jeopardy will not be the same for everyone.

For Brexiteers the risk will be events moving towards a second referendum and Brexit never happening.Force leaders to debate on TVMore than 120,000 people have signed the petition – have you?

The rest will fear the clock running out and a “no-deal” Brexit happening by default.

EU leaders have used this summit deliberately to raise those stakes.

One source told The Times: “We want all parties and factions in the British parliament to feel the bleak mid-winter.”

In other words, Brussels is deliberately blowing a chill wind through Westminster hoping it will concentrate the minds of MPs and get them behind the deal or else.

Plenty for our politicians to mull over this Christmas.

‘Mayhem’ & ‘Revolution’ If Brexit Not Delivered – Yellow Vests UK Protesters Say

'Yellow Vests' protesters in London

|AIWA! NO!|Yellow vest-wearing activists took to the streets of London on Friday, blocking traffic and chanting pro-Brexit slogans. They spoke about their mistrust in politicians and hopes for a clean exit from the European Union.

An activist told Sputnik they voted for Brexit because they wanted to reclaim control of their own country.

“We don’t want to be part of the federal European superstate that’s going to erode our rights and take away democracy. This is Britain. We are not European. We have never been European. This is our land and we are taking it back. If the political class don’t like it, they will see a revolution like they’ve never seen before. It is time to take up the spirit of Oliver Cromwell, rise up and reclaim what’s rightfully ours,” a protester said.

Inspired by the recent “gilet jaunes” movement in France, the London protest saw activists on Friday protest outside Downing Street, as well as Westminster Bridge, Tower Bridge and London Bridge.

They warned they were not going anywhere and were determined to support the Brexit cause among others.

“The yellow vests is just a start. This will spread out to the whole country,” an activist said.

'Yellow Vests' protesters in London

© PHOTO : EVGENIA FILIMIANOVA’Yellow Vests’ protesters in London

The UK Prime Minister Theresa May battles for concessions on the current Brexit withdrawal deal in Brussels, prompted by deep mistrust and opposition in the UK Parliament.

READ MORE: ‘Robust Discussions’ With EU But London Prepping for No Deal — PM May at Presser

During a press conference on Friday, the PM confirmed Downing Street is also making preparations for a no-deal scenario.

“We don’t want the deal. Dump the deal. No deal Brexit but trading under World Trade Organization terms. Our fishing industry was decimated by the European Union. We have seen mass migration. We’ve the outsourcing of all of our factories going into the EU. We can’t have this anymore. This country is being raped and pillaged. It is time we stood up for what we believed in,” an activist told Sputnik.

Speaking about the possibility of a second referendum on the nature of the deal, another activist said:

“If there is a second referendum, there will be mayhem. We will make sure that the polling stations are unreachable. The will of the people has to be respected. If it isn’t — you will see riots that make riots in France seem like nothing.”

Merkel Interrupts May, Juncker Calls EU Talks ‘Nebulous’ – Reports

German Chancellor Angela Merkel, left, and British Prime Minister Theresa May wait for the beginning of the plenary session of the informal EU summit in Salzburg, Austria, Thursday, Sept. 20, 2018.

|AIWA! NO!|Brexit was one of the main subjects at the EU Council meeting that took place on 13 December. Reports say that the discussion was marked by a showdown among the world’s two most powerful women (according to Forbes’ list), as well as the European Commission president.

The mood was “very bad” as the bloc’s heads of state argued about Brexit during the Brussels summit, the German outlet Welt reports, citing sources in EU circles. The newspaper claims that German Chancellor Angela Merkel interrupted her UK counterpart, Prime Minister Theresa May, several times during her speech and insisted that she clarify her position.

The German website Focus reported that Merkel had refused to accept May’s proposal to set a specific deadline for striking a free-trade agreement that could resolve the Northern Ireland issue instead of a backstop date. The outlet cites the EU insiders as saying that the UK prime minister suggested it was December, 2021.

Merkel reportedly rebuffed her claims, pointing out that it “always depends on two sides” whether a free trade agreement exists.

“If reinsurance is necessary because we have not found enough regulation for the transition phase, then we want to quickly overcome this backstop. And we will do our utmost to do that”, she said.

At the same time, she emphasized that the preparations for Britain’s unregulated exit, which would be the case if the UK Parliament does not agree on the deal, would continue. She pointed out that their “desire is to have an agreement”.

Netizens followed the meltdown with delight.

​European Commission President Jean-Claude Juncker also called out the British government, stating that he needs clarification as to what exactly it expects from Brussels. He slammed the discussion as “sometimes nebulous and imprecise”.

“I do find it uncomfortable that there’s an impression perhaps in the UK that it is for the EU to propose solutions. It is for the UK leaving the EU and I would have thought that it was rather more for the British government”, he said at a press conference.

At the same time, Juncker announced that the EU would intensify its preparations for a UK exit without agreement. He stated that the commission would present guidelines for a hard Brexit.

READ MORE: ‘The UK is Headed for a Crash Out Brexit’ — Professor

Upon her arrival at the EU Council meeting this Thursday, UK Prime Minister Theresa May declared that she had come “to get legal and political assurances to assuage the concerns of my fellow MPs in Westminster”.

May toured some European capitals this week, including The Hague and Berlin, to convince European leaders to give her a bit more leeway so that she does not come home from the Brussels summit empty-handed.

The single market for goods and services was part of the discussion, since – under the Brexit agreement – the United Kingdom would effectively remain within the EU customs union. This is precisely why the “Brexiteers” refuse to accept her plan, deemed too weak and allowing the bloc to determine the United Kingdom’s economic future.

May’s vision of Brexit was put to the test on Wednesday night when the governing Conservative Party voted 200-117 to declare confidence in the prime minister.

Theresa May’s furious row with Jean-Claude Juncker caught on camera at disastrous Brexit summit

British Prime Minister Theresa May and the European Council President Jean Claude Junker
British Prime Minister Theresa May and European Council President Jean – Claude Juncker

An awkward exchange was broadcast on the European Council’s live feed, as the Prime Minister appeared to argue with the Brussels chief

|MIKEY SMITH, MIRROR|AIWA! NO!|An apparently furious row between Theresa May and Jean-Claude Juncker has been caught on camera, as the Prime Minister’s last-ditch Brexit summit sank into disaster.

Furious Mrs May and the European Council President appeared to exchange tense words as EU leaders sat down for a round table in Brussels this morning.

The Prime Minister, clutching her handbag, appeared uncomfortable as Mr Juncker held her elbow as the pair talked.

It’s unclear what exactly what was said, but Mr Juncker appeared to shake his head and say “no” on several occasions.

And as an aide walked over, apparently to intervene, the European Council President was seen holding his hand out, seemingly rejecting what Mrs May had to say.

The Prime Minister was delivered a devastating blow by EU leaders last night after seeking help to win over Tory rebels as her party descended into civil war.

The awkward exchange was caught on camera
The awkward exchange was caught on camera
Mrs May has begged for more concessions on the Northern Ireland border
Mrs May has begged for more concessions on the Northern Ireland border
READ MORE

Mrs May had begged them to give ground on the Irish backstop as she faces a battle to get her Brexitdeal through Parliament.

But President Juncker rejected her plea to put a 12-month limit on the unpopular insurance plan to avoid a hard border in Ireland.

The top eurocrat accused the UK of being “nebulous and imprecise” as he savaged the PM’s attempts to unblock the stalemate that has thrown her Brexit plans – and her government – into disarray.

“We don’t want the UK to think there can be any form of renegotiation, that is crystal clear. We can add clarifications but no real changes,” he said.

“Our UK friends need to say what they want, rather than asking what we want,” he said.

Mrs May now faces a difficult press in conference at noon.

The pair were seen in heated conversation

Pound & FTSE stall, gilts fall on May’s ‘lame duck’ survival

‘I recognise the strength of concern in the House of Commons and that is what I will be putting to colleagues today,’ May said in reference to her unpopular EU withdrawal deal.

|AIWA! NO!|Theresa May’s ‘lame duck’ victory took the zest out of UK currency, government bond and stock markets today as investors weighed the political complexities surrounding the prime minister as she seeks a way out of the Brexit crisis.

The pound, having dipped after May survived last night’s no-confidence vote in her leadership of the Conservative party with a 200-117 majority of her MPs, initially regained momentum but then settled back at $1.2635 against the dollar after the premier returned to Brussels to plead for concessions from European Union leaders.

Sterling strengthened slightly against the euro, which dipped to 89.88p after the European Central Bank noted weaker economic data as it confirmed it would halt its huge bond-buying stimulus policies next month but was cautious about raising interest rates next year.

‘I recognise the strength of concern in the House of Commons and that is what I will be putting to colleagues today,’ May said in reference to her unpopular EU withdrawal deal.

May’s decision on Monday to postpone a Commons’ vote on the deal, which hardline Brexiteers fear would lock the UK into a customs union with the EU as part of the ‘Irish backstop’ agreement, was the catalyst for the no-confidence ballot.

‘I don’t expect an immediate breakthrough, but what I do hope is that we can start work as quickly as possible on the assurances that are necessary,’ May added.

Government bonds, or gilts, also see-sawed. Earlier they rose in price as investors sought out the safe havens against the UK’s political difficulties and the obstacles facing May as she tries to get her deal through Parliament.

BREXIT ZUG TRAIN; Are We Almost There Yet ?


ARE WE NEARLY THERE YET?

|AIWA! NO!|In the summer, Sandy Nairn, Chairman of Templeton Global Equity Group and CEO of Edinburgh Partners, authored a paper entitled The Politics and Processes of Brexit. His analysis drew on insights from former diplomat Lord Kerr, an advisor to Edinburgh Partners and one of the authors of Article 50 of the Treaty of Lisbon, which outlines steps a country must take to leave the European Union. The paper explored a number of scenarios the United Kingdom faces on its path to Brexit. One of the questions Nairn posed was “Are markets underestimating the chances of the United Kingdom not leaving?” In this update, he examines the current situation and revisits that question.

Sandy Nairn

Sandy Nairn
Chairman of Templeton Global Equity Group 
CEO of Edinburgh Partners

After a tumultuous few days for UK Prime Minister Theresa May and UK financial markets, there remains very little we can say with absolute certainty about Brexit.

A withdrawal deal agreed upon by UK and European negotiators have is set to go to Parliament in the second week of December. However, it has drawn derision from all sides, and the key question for most observers is whether the UK government can secure enough votes for it to pass.

The agreement as it stands, sets out the details of the financial settlement governing the United Kingdom’s departure from the European Union (EU). It also includes a section on citizens’ rights after Brexit, for EU citizens in the United Kingdom and British citizens elsewhere in the EU.

Several of the deal’s provisions are likely to prove sticking points for some crucial players.

The treatment of Northern Ireland in particular looks to be an obstacle. The withdrawal deal proposes a backstop that would maintain an open border between Northern Ireland and the Republic of Ireland, in the event that there is no trade deal agreed by 29 March 2019.

However, that arrangement has been rejected by Northern Ireland’s Democratic Unionist Party (DUP) because it treats Northern Ireland differently from the rest of the United Kingdom. Crucially, May relies on the support of the DUP for her parliamentary majority. Losing DUP support could threaten the Conservative Party’s ability to remain in power.

Ardent Brexiteers within the Conservative Party are also unhappy with the deal. They feel the continued influence of Europe over key UK policies, as set out in the withdrawal agreement, remains too large.

For the Scottish Tories, uncertainty regarding the proposed fisheries policy might suggest that the Scottish fishing industry is again being sacrificed. A number of Scottish Tory members of Parliament rely on the fishing community for votes.

On the opposition benches, MPs from both the Labour Party and The Scottish National Party (SNP) will likely be ordered by their leaders to vote against the deal.

This means that the only plausible route to get the deal approved is for the vote to be framed as a binary outcome. In other words: “It’s either this deal or it’s no deal.”

Parliament Will Decide: Deal or No Deal

We expect any bluff would likely be called. If that does occur, the deal would almost certainly be rejected in Parliament.

In turn, we’d expect the Labour Party would then demand a general election in a bid to oust the government from power. The question then is whether the Tories would be willing to propose a second referendum on Brexit to head this off.

Again, it comes down to the arithmetic of votes, but the debate over a second referendum would likely intensify, and we think Labour would find it increasingly difficult to avoid staking out a clear position. If we got to that situation, it is highly likely, in our view, that one of the major parties would propose “going to the country” for a general election, while offering a second referendum thereafter. Whichever party does this first would leave its opponent in a very difficult position.

In the meantime, it is hard to see how anything can be achieved without an extension to the negotiating period.

How Could Investors Respond?

As the situation unfolds, we need to see whether there are further resignations and identify the likely direction of the political consensus regarding Brexit next steps. Then we can better frame the risk-reward calculations on investments.

The probability of both a general election and a second referendum have just gone up, which means that among the range of potential outcomes, a so-called “tail event” has become more likely. One tail includes a Labour government (with or without Brexit), and the other tail includes “No Brexit” (with or without the Tories still in power).

As we pointed out in our paper, The Politics and Processes of Brexit , markets are likely to take the threat of a change in government much more seriously than they have in the past. That has implications for both the Gilt and UK equity markets.

The current Labour leadership has been very clear that nationalisation or highly prescriptive regulation of certain critical sectors, the return of collective wage bargaining and a significant increase in government expenditure are all key policies.

From the investment perspective, our approach to a potential Labour government would begin by avoiding the industries where regulation and nationalisation are mooted. We are simply not being paid to take this risk.

More international businesses should continue to trade as before, but a risk premium for corporate tax changes and other possible burdens might need to be added.

In the meantime, we need to pay very close attention to the electoral arithmetic to see whether “Remain” and a continued Conservative government could be a likely outcome.

We believe it is likely over the coming months risk premiums will rise and potentially spur investment in stocks which have already been largely discounted for a worst-possible Brexit outcome, including in the financial services and construction sectors. Periods such as this often provide meaningful opportunities, and a prerequisite for taking advantage of them is understanding the boundaries of risk and reward.

To hear Sandy Nairn and Lord Kerr discuss Brexit, listen to our archived episode of Talking Markets.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Because market and economic conditions are subject to rapid change, comments, opinions and analyses are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy.

Data from third-party sources may have been used in the preparation of this material and Franklin Templeton Investments (“FTI”) has not independently verified, validated or audited such data. FTI accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user. Products, services and information may not be available in all jurisdictions and are offered by FTI affiliates and/or their distributors as local laws and regulations permit. Please consult your own professional adviser for further information on availability of products and services in your jurisdiction.

Boris Johnson given 24 hours to respond or face legal action over Brexit ‘lies’

Boris Johnson, the former mayor of London, waves a Cornish Pasty during the first day of a nationwide bus tour to campaign for a so-called Brexit in Truro, U.K., on Wednesday, May 11, 2016. While online polls suggest the contest for the June 23 referendum is too close to call, less frequent telephone polling has put the "Remain" camp ahead. Photographer: Luke MacGregor/Bloomberg via Getty Images

|AIWA! NO!|Boris Johnson has been warned he has just hours to respond to claims he lied about the UK sending £350,000,000 a week to Brussels – or face prosecution.

The clock is ticking for the Vote Leave figurehead after a private prosecutor announced plans to take him to court over figures plastered over his big red bus. Marcus Ball said: ‘During the 2016 referendum I witnessed the disgusting demonstration of the depths to which our political professionals were willing to stoop.

 ‘I want to prevent conduct of that kind from becoming the normal political standard in UK politics. ‘I knew that if we could win a prosecution against such immoral and untrustworthy actions the precedent could make it illegal for them to occur in future.’

The former Foreign Secretary was notified on November 16 of the intention to bring a private court case over alleged misconduct in public office. Microwave, bricks and wheelie bins launched at ambulances in spate of violence He was given 28 days to reply and that deadline expires at the end of Friday December 14. So far Mr Johnson and his team have remained silent.