"KEEP CALM AND CARRY ON!" That was the message on a morale-boosting poster produced by the British government before the outbreak of the Second World War in 1939. The same message – more or less – is being sent out by the current British government as Britain faces what has been described as its biggest peacetime challenge since the defeat of Hitler: Brexit. Comparing Britain’s departure from the European Union with a world war may seem laughable. But some of the rhetoric swirling around Brexit – and the possibility of leaving the EU without an agreement on the terms of the divorce or the future trading relationship with the bloc – has been “hair raising and extreme,” in the words of Britain’s Brexit Secretary Dominic Raab. There has been talk of food shortages, hospitals running out of drugs, aircraft being grounded and even riots in the event of a “no deal” Brexit. Raab says this is hysterical nonsense. And he’s just embarked on an information blitz designed to calm everyone down and allay some of the more lurid fears about what will happen after the official departure date, March 29, 2019. Raab has unveiled an initial batch of 25 “technical papers” advising companies and individuals how to prepare for a no-deal scenario. He promised the Brits that food and medical supplies would not run short … and that their favorite sandwich would not be at risk. “Let me assure you that contrary to the wilder claims, you’ll still be able to enjoy BLT after Brexit,” he said. Bacon from Denmark, lettuce from Spain and tomatoes from the Netherlands will continue to arrive in Britain, Raab said, along with the rest of the 30 percent of the nation’s food that comes from continental Europe. A no deal Brexit would not be a national emergency, he asserted. “There are no plans to deploy the Army to maintain food supplies,” Raab insisted. In an interview with the BBC, Raab said Brexit, with or without a deal would be good for Britain “over the long term.” He admitted however, leaving the EU without a deal, after more than 45 years of membership, could be risky in the short term. The risks do seem rather daunting. Unless Britain and the EU work out a new trade relationship, customs checks would be reintroduced and that could be bad news for food imports and exports. “Fresh produce is going to be massively impacted if there are any delays at the ports. Products will arrive less than fresh on the shelves,” said Ian Wright, a food industry spokesman. “The whole question of a no-deal exit is a very grisly prospect,” he said. Many British manufacturers of goods other than food could be affected. Raw materials and components, as well as finished products, criss-cross the border. Rod McKenzie of the main trucking industry trade group, the Road Haulage Association, said that traffic would be vulnerable. “If there is no transition deal, there will be very, very severe disruption to supply chains,” McKenzie said. Intangible trade could also be at risk. Insurance contracts and even pensions taken out with British companies by people or businesses in continental Europe could be rendered invalid if there’s no deal. Jonathan de Beer of the Association of British Insurers said millions of people could be impacted. “The Bank of England estimates there’s around 38 million insurance contracts, around 55 billion pounds worth, which is a lot of customers who are left in legal limbo,” he said. Brexit supporters protest that all this is designed to scare the Brits into agreeing on an exit deal loaded in the EU’s favor or even abandoning Brexit altogether. They argue that no-deal wouldn’t be a disaster. Since the EU has an $80 billion trade surplus with Britain, the bloc would do everything in its power to ensure that its own exporters do not lose out. So, food and other supplies from continental Europe would continue as normal. And if the U.K. does leave without a deal next March, the country would be free to slash duties on all its imports and reap enormous benefits. “We would be able to cut the costs of our imports on goods across the board by a very considerable level. You’re looking at savings in the many billions of pounds a year for British consumers,” argued Martin Howe, a pro-Brexit lawyer. The British government does not share his enthusiasm for a no-deal Brexit. It’s bending over backwards to secure an agreement. And, after the latest round of talks in Brussels (and despite his KEEP CALM AND CARRY ON campaign) the Brexit Secretary said he’s optimistic that a deal is within reach. Read again Striving to avoid a no-deal Brexit : https://ift.tt/2wBq8HV
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The German financial regulatory authority, BaFin, has demanded that EU officials in Brussels take urgent action to prevent mayhem in the derivatives market after Brexit. The change in German policy is a sign of support for the Bank of England which has warned that $67 trillion of interest rate swaps and other derivatives could flounder if a plan is not agreed on between Europe and the UK before Brexit, The Daily Telegraph reported. The EU Commission has so far expressed the view that financial regulation post-Brexit is for banks and other financial companies to sort out, even in the event of a wider deal, despite European, Asian and US banks arguing that they cannot do it alone, and that the fall-out if no action is taken could create a global financial shock. "It is almost impossible to fix that problem exclusively just by one side of the stakeholders involved, let it be the industry itself or individual supervisors," BaFin’s president, Felix Hufeld told Bloomberg at a forum in Frankfurt, adding that the industry must be taken seriously. There has to be "a solution on a political level" outlining a legislative or regulatory structure to prevent disruption, Hufeld said. Britain has taken measures to try and guarantee "contract continuity" for foreign banks operating in the City, even if passporting rights are lost, but the EU hasn’t yet reciprocated. The Bank of England and German regulator BaFin are now working to the same goal, an indication that Germany is starting to step into the negotiations as the threat of a no-Brexit deal persists. Read again The City of London has gained a powerful ally in the fight to keep a key business in the UK post-Brexit : https://ift.tt/2wBDnZbBritain must do more to protect EU food products such as champagne and Parma ham, Brussels has warned, highlighting a sensitive area of the bloc’s trade policy as a vital sticking point along with the Irish border in final Brexit negotiations. In talks in Brussels on Friday Michel Barnier, the EU’s chief Brexit negotiator, said it remained a core demand that the UK respect thousands of “geographical indications”, that guarantee the origins of more than 3,000 products from Tuscan olives to cognac. By committing to enforce GIs, EU members including Britain pledge to keep foreign imitations of the products off their markets. Getting other countries to enforce the GIs has been a core EU goal in international trade talks and Brussels is adamant that such protection remain in Britain after Brexit. Brexit “cannot lead to a loss of existing protection for intellectual property”, Mr Barnier said. “It must be clarified in the withdrawal agreement . . . We must protect the entire stock of geographical indications.” In a week of Brexit talks in which progress was made on issues such as future security co-operation, Britain’s unwillingness to make a commitment to protect many of the EU’s most famous foods from imitators has emerged as an irritant. EU officials said they had been told by Britain that GIs would need to be reviewed and re-approved again by the UK government after Brexit. RecommendedSpeaking alongside Mr Barnier in Brussels, Dominic Raab, the UK Brexit secretary, linked the issue to more general progress on mapping out future trading arrangements — a priority for the UK in the talks. “We do understand the importance for many European countries of resolving this,” Mr Raab said. “And of course we empathise particularly on this issue because we are very keen to make sure we resolve the broader trading relationship.” Mr Raab was in Brussels to try to advance the Brexit negotiations, with time running out before an EU summit in October that is supposed to sign off Britain’s EU withdrawal agreement. This week Mr Raab conceded “a measure of leeway” over how quickly a deal could be signed, with a possibility that talks “may creep beyond” the October 18 meeting. Mr Barnier and Mr Raab said talks were advancing on a framework for security and criminal justice co-operation after the UK leaves — notably the outlines of a new extradition agreement, and arrangements for sharing fingerprint and DNA data. Mr Barnier also highlighted progress made in setting rules to govern the treatment of EU citizens’ data held in the UK. But the EU Brexit negotiator warned that the lack of an agreement on how to prevent a hard border between Northern Ireland and the Republic of Ireland after Britain’s departure was still hanging over the talks. RecommendedBrussels has insisted that the UK’s withdrawal agreement must include a binding “backstop” arrangement to retain a “soft” border even if Britain and the UK cannot settle the issue as part of trade talks. While the Irish border was not on this week’s agenda, Mr Barnier warned that it was “urgent to work on the text of an operational backstop”. “I have asked Dominic to provide us with the technical data we need for our work,” he said. “This backstop is critical to conclude the negotiations,” he said. “Without a backstop, there is no agreement.” UK negotiators see the issue of geographical indications for EU products as a point of leverage in negotiations with Brussels, where Britain has frequently found itself on the defensive. But one EU official warned that the move could backfire by irritating countries such as France and Italy that depend on GIs to protect prized exports. The official said the tactic was “dangerous”. Read again Barnier grills UK on Brexit food label guarantees : https://ift.tt/2C5rSPHGerman investors and banks are increasingly preparing for an unregulated, hard Brexit. According to Theodor Weimer, the head of Deutsche Börse – the ninth-biggest stock exchange in the world – the vast majority of investors expect the UK to leave without a deal. While Mr Weimer does not assume major upheavals, other experts expect chaotic conditions on the financial markets. Wolfgang Fink, Germany chief of the US investment bank Goldman Sachs, said on Thursday at the "Handelsblatt" bank summit: “We have to adjust to the extreme scenario.” Brexit taskforces had been set up some time ago and there was agreement with the with regulators, Mr Fink said. He added that new contracts with customers were also being prepared. The head of German financial supervision BaFin, Felix Hufeld, said an abrupt, disorderly transition would "intervene in hundreds of thousands of treaties" and cause "serious insecurity”. He said: “We overseers would then have to implement emergency measures." This could mean regulators using temporary permits to “minimise chaos in the short term”. The UK Government has also been preparing for a no-deal scenario, it announced last week. There was concern about the published documents which said free movement of goods and areas of payment transaction could come to a standstill. German Finance Minister Olaf Scholz urged German companies to make arrangements for this kind of scenario. He said it was difficult to say where there will be a withdrawal agreement, but there was "no safe starting position". The minister added that some people will have to "adjust to the fact that there could be an unregulated Brexit". Germany’s financial sector has a large workforce in London, but Frankfurt has been hoping to profit from Brexit. There were reports this year which said up to 10,000 jobs could move to the continent. Goldman Sachs manager Mr Fink said they would have to relocate about 500 employees to the continent and that "a lot of them will go to Frankfurt”. But behind closed doors, many banks said it is the international and high-paid investment bankers who were used to a certain lifestyle in London and were not interested in relocating to Frankfurt. Additional reporting by Monika Pallenberg. [unable to retrieve full-text content] BRUSSELS (Reuters) - EU and UK negotiators on Friday talked up prospects of agreeing a Brexit deal this autumn, citing recent progress in detailing very close security cooperation to take effect after Britain leaves the bloc. Britain's Secretary of State for Exiting the European Union, Dominic Raab and European Union's chief Brexit negotiator, Michel Barnier, leave after a meeting at the EU Commission headquarters in Brussels, Belgium August 31, 2018. REUTERS/Eric Vidal The European Union’s Michel Barnier said it was “possible” to get an agreement in time for a summit of all the bloc’s leaders in Brussels on Oct. 18-19, though a delay into November was also possible. After his latest talks with Barnier, Britain’s Brexit minister Dominic Raab said he was “stubbornly optimistic” and “as confident as before, if not more” that there would be a deal. The two said they made progress over security cooperation, including on exchanging data. “Europe’s security is the United Kingdom’s security,” Raab told a joint news conference. Barnier said unresolved issues included geographical indication labels for specialized local products, nuclear cooperation, data protection and the role of the EU’s top court in policing the agreement. After weeks of warning of growing risk of a damaging no-deal Brexit and signaling delay was expected if there is to be any Brexit deal, the EU’s strategy is now to highlight how close cooperation with Britain is possible after Brexit to make London more willing to accept divorce terms. That goes specifically for the sensitive issue of the EU-UK land border between Ireland and British-ruled Northern Ireland, where the EU wants a “backstop” solution in case of no deal, which includes terms that are anathema to London. “We must have a detailed backstop solution, which is legally operational in the withdrawal agreement,” Barnier said. “This backstop is critical, it’s essential to concluding these negotiations. With no backstop, there will be no agreement.” Barnier said the EU and UK were working for an “unprecedented partnership” in the future that would include a broad free-trade agreement, as well as sectoral cooperation deals in aviation, security and research, among others. “It’s unprecedented, such a partnership with a third country,” Barnier said. “But the preliminary condition to that is that we have to organize an orderly withdrawal of the UK. That’s the condition of the unprecedented partnership in the future.” Additional reporting by Philip Blenkinsop, Writing by Gabriela Baczynska; Editing by John Stonestreet and Peter Graff
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Read again EU, Britain talk up chances of autumn Brexit deal : https://ift.tt/2N5fzqU
The EU’s chief Brexit negotiator has warned that the bloc will not agree to a deal that does not protect European specialities such as parmesan cheese and Parma ham, saying that he has “concerns” about Britain’s unwillingness to offer guarantees. The EU’s system of “geographical indicators” that protect its emblematic food products has emerged as a sticking point in the final stretch of Brexit negotiations, with Brussels frustrated by British insistence that the protections will need to be reassessed by the UK government on a case-by-case basis. “I expressed again my concern,” Michel Barnier said at a joint press briefing with UK Brexit secretary Dominic Raab in Brussels. Brexit “cannot lead to a loss of existing protection of intellectual property”, he said. “It has to be clarified in the withdrawal agreement.” The geographical indicators are one of the most sensitive issues in EU trade policy, covering around 3,000 different products. EU officials said that Britain has told them that, while the European geographical indicators have been protected in the UK up to now, they will need to be reviewed and re-approved again by the government after Brexit. One official said that it was “dangerous” for the UK to stall on the issue given the political importance of the protections for EU nations such as France and Italy. But Mr Barnier and Mr Raab, who were speaking after their latest round of Brexit talks, also emphasised that progress is being made, and that both sides still have the ambition to reach a deal on the UK’s withdrawal agreement by October. “There is a measure of leeway, but that is what we are aiming for,” said Mr Raab. Mr Barnier also underlined that the negotiating teams have found common ground on some key aspects of the future EU-UK relationship, notably on security and criminal justice co-operation, where plans have been developed for an extradition agreement and also for the exchange of law enforcement data such as DNA and fingerprints. “We have now the elements to build a close and effective relationship on many subjects,” said Mr Barnier, although he added that there were limitations to how far the EU could go on security co-operation given that Britain will be outside both the EU and Europe’s Schengen free-travel area. Mr Raab said that Britain would like to be “even more ambitious”, adding: “I understand the EU position and the legalism that underpins that and the principles that underpin that.” Mr Barnier also confirmed the bloc’s offer to the UK to remain in non-security sensitive parts of the bloc’s Galileo satellite navigation programme. “Our offer includes also the access to the public regulated service signal,” Mr Barnier said. “It is now for the UK to decide if it wants, as we wish, this close co-operation”. Both Mr Raab and Mr Barnier emphasised that work is continuing to find a solution to the question of the Irish border after Brexit, with Mr Barnier warning that the issue needs to be addressed with “urgency”. “I have asked Dominic to provide us with the technical data we need for our work,” he said. “This backstop is critical for closing this negotiation,” he said. “Without a backstop, there is no agreement”. Read again Brexit talks hit snag on EU food labelling protections : https://ift.tt/2wx7sJY Your usage has been flagged as a violation of our terms of service. For inquiries related to this message please contact support. For sales inquiries, please visit http://www.bloomberg.com/professional/request-demo If you believe this to be in error, please confirm below that you are not a robot by clicking "I'm not a robot" below.Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review the Terms of Service and Cookie Policy.Block reference ID:[unable to retrieve full-text content] LONDON (Reuters) - Positive signals from London and Brussels over the trade component of Britain’s EU divorce talks drove sterling higher against the euro on Thursday, though the risk of a no-deal Brexit kept the pound well off 2018 highs. Sterling hit a one-week high against the euro and was heading for its biggest two-day rise since November after EU negotiator Michel Barnier said on Wednesday that the bloc was ready to offer Britain an unprecedentedly close relationship after it leaves. Barnier tempered those comments on Thursday, telling German radio that the European Union must also prepare for the possibility of Britain leaving without concluding any deal. “Barnier’s comments are more nuanced and that has prompted a slight positioning switch towards sterling rather than a broader fundamental change towards the currency’s outlook,” said Neil Mellor, a senior currency strategist at BNY Mellon In London. Despite this week’s run which took sterling as high as 89.93 pence per euro on Thursday, the currency remains well off its year-to-date high of 86.2 hit in April. Barnier’s comments did not depart significantly from his previous position on Brexit. EU diplomats said his aim was to talk up the trade deal in order to entice Britain into accepting it and an Irish border emergency plan known as the backstop, a sticking point in the Brexit talks. “Barnier is working for a deal, he talks trade to get the Irish backstop through,” a senior EU diplomat said. British Brexit minister Dominic Raab is due to meet Barnier in Brussels on Friday in an attempt to speed up the talks. GILT COMPLEXWith seven months to go until Britain leaves, the government has been ramping up its no-deal preparations, and negotiators on both sides increasingly expect an informal October deadline for reaching an agreement to slip into November. Raab said on Wednesday that, while a deal was within sight, there was “a measure of leeway” over the exact timetable. Foreigners’ net holdings of British government debt fell by a record amount last month, a move partly driven by a large volume of maturing bonds but one which also revived concerns about the effect of Brexit on investors’ appetite. Bank of England data showed a net 17.153 billion pound drop in foreigners’ holdings in July, the largest since records began in 1982. As the political outlook over Brexit has clouded, hedge funds have built short positions in recent weeks against the pound to more than one-year highs. That means any slight change in sentiment towards the currency can lead to big moves. For sterling bears finding it increasingly expensive to fund these short bets, some traders said Barnier’s comments - indicating a slightly more conciliatory tone rather than a major shift in negotiating stance - were the final straw. “Higher sterling volatility means more difficulty in holding short positions and the latest headlines are leading to a wipeout in some of those aggressive shorts,” said a trader at a European bank. The latest developments have also prompted derivative traders to cut their long euro/sterling bets, having ramped up their positions by building some large option bets around the 91-pence level. Against the dollar, the British currency fell 0.3 percent and traded close to the $1.3 level. GBP positions - reut.rs/2Pk6QOZ Additional reporting by Gabriela Baczynska; editing by John Stonestreet, Angus MacSwan and David Stamp
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Read again Sterling rises on Brexit hopes, but no-deal risk curbs gains : https://ift.tt/2Nz9LD1
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November 2018
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