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The European Union will publish a draft Brexit withdrawal treaty on Wednesday and it’s set to be explosive: it will ignore Theresa May’s recent requests about the transition and risks prompting a domestic crisis over the sensitive issue of the Irish border.
The agreements reached in December to move Brexit talks along to trade have now been written into legal text, Tim Ross and Ian Wishart report. There are still some holes to fill in, but the 100-page document will become the basis of the withdrawal deal that both sides want completed by the end of the year.
Talks are continuing on the shape of the Brexit transition period, so it might look a bit combative to the Brits for the EU to publish a legal text on what it will look like, particularly as the document is not expected to take into account May’s recent proposal for the transition to be of flexible length. Once again, it looks to the U. as if the EU is taking the initiative and boxing in the U.
The document is also likely to leave out a key compromise May is seeking on the U.’s future land border with Ireland. In December May promised to avoid a hard border on the island of Ireland but also to avoid one between Northern Ireland and mainland Britain. The second promise won’t be included in the legal text as it’s considered an internal U. That will enrage the Northern Irish Democratic Unionist Party that props up May’s government.
The text will focus on the fall-back option of what happens if the future trade deal isn’t deep and broad enough to keep the border open. EU diplomats say this is because May has failed so far to give any detail on how she proposes to ensure there is no hard border infrastructure of customs checks at the frontier between Northern Ireland and the Republic of Ireland.
Irish Deputy Prime Minister Simon Coveney said Ireland was “very happy” with the text. But he also struck a conciliatory note on Monday, saying there would probably be some “additions needed over time” and that the text is still to be negotiated.
But in another potential flashpoint, the EU will also demand the U. accept indefinite oversight of the European Court of Justice as the arbiter of disputes related to the treaties, the Financial Times reports. There’s going to be a lot of detail to comb through for devils on Wednesday
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Corbyn’s Plan | Labour leader Jeremy Corbyn laid out his vision for Brexit – staying in a customs union but aiming for a better deal than the one Turkey has with the EU. Corbyn would want a greater say over trade policy to avoid Britain becoming a rule-taker. EU officials privately said his plan could be workable. It sets the stage for pro-EU Tories to join forces with Labour to try to force May to reconsider her policy. All eyes are on Friday, when May speaks. We’ll watch for hints that she will try to get a customs deal as good as the one Corbyn proposes. For now, both parties are seeking Brexit cherry picking.
Fox Cries ‘Sell-Out’ | Trade Secretary Liam Fox will accuse the Labour Party of plotting to “sell out” the country’s interests in a Tuesday speech that may be aimed as much at potential Tory rebels as the opposition. “The inevitable price of trying to negotiate with one arm tied behind our back is that we would become less attractive to potential trade partners and forfeit many of the opportunities that would otherwise be available to us,” he will say.
Read more: What is a customs union and how it helps business
Companies Cautious | Borrowing by U. companies fell the most in almost three years in January, according to new figures from the banking industry. Lending to non-financial companies dropped 1.4 percent from a year earlier, lobby group UK Finance said Monday. Mortgage approvals for house purchases also declined almost 10 percent last month compared with a year earlier.
Goldman’s £1 Billion Building | Goldman Sachs Group Inc. is considering a sale-and-leaseback of its new European headquarters in London, Jack Sidders reports. The building, which could sell for more than £1 billion ($1.4 billion), will have about 78,000 square meters (840,000 square feet) of internal office area and could accommodate about 9,600 workers. The move would mean Goldman could extract the capital “in case there is a Brexit wobble or interest rate rise,” Bloomberg Intelligence analyst Sue Munden said. As yet, no tweet from CEO Lloyd Blankfein.
On the Markets | The pound was broadly flat on Tuesday at $1.3963, after closing almost unchanged on Monday. Expectations were met for a “soft-Brexit type speech” from Jeremy Corbyn, said Neil Jones, head of hedge fund sales at Mizuho Bank Ltd. “Given the market has gone into this long and the pound has kept its rally, it suggests investors are not too disappointed.
Corbyn’s Brexit speech was unusual in many ways – it won grudging praise from the business community and even from the likes of former Chancellor of the Exchequer George Osborne.
But the event was unsurprisingly Corbynista in many ways. Labour lawmaker Rebecca Long-Bailey, who chaired the event, first failed to recognize any of the reporters she called on for questions. Then she called on a non-journalist to ask a question, and it was pretty softball: “I want to say please will you hurry up and be our prime minister,” the would-be inquisitor asked Corbyn.
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