Brexit Bulletin: Short of Time and Money?

  • May says no time for a change of leader as Brexit talks loom
  • EU ministers discuss Brexit position again on Monday

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The prime minister wants to make her point clear: Time is short, and now is not the time to be changing tack.

Amid reports that the EU wants Brexit talks to start on June 19, eleven days after the election, Theresa May will say in Wales today that voters should stick with her rather than elect Labour leader Jeremy Corbyn.

Theresa May out campaigning with Paul Holmes, a local Conservative candidate in Southampton, earlier in May
Photographer: Simon Dawson/Bloomberg

“The U.K.’s seat at the negotiating table will be filled by me or Jeremy Corbyn,” she’ll say, according to her office. “The deal we seek will be negotiated by me or Jeremy Corbyn. There will be no time to waste and no time for a new government to find its way. So the stakes in this election are high.”

Questioning Corbyn’s leadership skills and warning of a botched Brexit have been touchstones for May, who called the election early in order to strengthen her mandate going into talks.

She may have to make her case even more strongly as fresh opinion polls suggest her Conservative Party’s lead is shrinking after the parties released their manifestos last week. The Tory advantage over Labour has halved to 9 percent from 18 percent, according to a new Survation survey for Good Morning Britain.

On the upside for May as she swings into Wales, Bloomberg’s Alex Morales reports how even towns in the principality that traditionally rejected her Tories are now happy to back her.

Election Polling

As May speaks, Europe ministers from the 27 other EU nations will be gathering in Brussels to review and possibly revise their negotiating directives.

Weekend Recap

On the campaign trail, the Tories don’t just attack Corbyn’s credibility. They regularly bash Brussels as well, a theme May’s team returned to on Sunday.

Brexit Secretary David Davis again threatened to quit talks unless the bloc drops its demands for a divorce payment as high as 100 billion euros ($112 billion). The warning was enough to weaken sterling overnight. Britain’s negotiations would otherwise be plunged into “chaos,” Davis told the Sunday Times. Even a £1 billion settlement would be “a lot of money,” he said.

“We don’t need to just look like we can walk away, we need to be able to walk away,” Davis said. “Under the circumstances, if that was necessary, we would be in a position to do it.”

“The first crisis or argument” will be the structure of the talks, he added. The U.K. wants divorce and trade talks to take place in parallel, a position the EU rejects.

Brexit Secretary David Davis insists the U.K. needs to be able to walk away from talks.
Photographer: Chris Ratcliffe/Bloomberg

May also weighed in on the Brexit bill, telling the Sunday Telegraph that “money paid in the past” by the U.K. into joint EU projects and the European Investment Bank ought to be taken account in the final sum.

Meanwhile, Foreign Secretary Boris Johnson wrote in the Mail on Sunday that the U.K. would aim to “continue to co-operate with our European friends.” Work and Pensions Secretary Damian Green, a europhile, told the Observer that Remain voters should give up hoping Brexit can be reversed and instead back May to secure a “special partnership” with the EU.

The European Parliament’s Brexit point man Guy Verhofstadt told the Sunday Times that although he enjoys British marmalade “nothing will change” in the EU because of how the U.K. votes.

Lessons Learned

With less than three weeks to go until election day, Bloomberg’s Rob Hutton has reviewed what we’ve learned so far.

There hasn't been much discussion of Brexit, despite May’s repeated urgings. She’s not added much to her negotiating position and  Labour’s position is so confused they’ve discussed other topics, Rob Ford of Manchester University said.

Yet the split from the EU still matters. The 2016 referendum realigned British politics as the U.K. Independence Party’s support collapsed and moved en-masse to the Conservatives, giving May an apparently unassailable lead. Brexit also magnifies the question of competence swirling around Corbyn, according to Philip Cowley of Queen Mary University, London.

Brexit Bullets

  • Heathrow wants to use Brexit to allow airlines to serve more domestic airports; LOT Polish Airlines is to increase capacity on Warsaw-Heathrow flights, the Telegraph reports
  • Losing access to the single market in services could cost the U.K. economy up to £36 billion a year, according to an analysis by the Center of Economic Business Research for the pro-EU Open Britain campaign
  • 71% of managers surveyed by the Chartered Management Institute rated to the single market and freedom of movement as the best outcomes for the negotiation
  • German Chancellor Angela Merkel said the EU needs to guard against the U.K. gaining an economic edge by easing regulation when it leaves the bloc
  • German exports to U.K. face 4.2 billion euros in tariffs under Brexit, according to a German government analysis seen by Bild am Sonntag
  • The U.K. needs immigration of at least 200,000 people net per year to avoid “catastrophic consequences” for the economy, according to a report from research group Global Future cited by the Telegraph 

And Finally…

EU buildings (on the right) contrast with the traditional architecture of Luxembourg.
Photographer: ? Fr?d?ric Collin/Moment Open

Little Luxembourg is luring firms looking for a post-Brexit foothold in the EU, from JPMorgan Chase to American International Group.

While many find the Grand Duchy a multilingual paradise, would-be expats are being warned that the country is an acquired taste with clogged roads, expensive homes and a small cultural scene, Bloomberg’s Stephanie Bodoni reports.

IMF

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