Photo Illustration: Tom Hall/Bloomberg

Brexit Bulletin: Now Comes the Hard Part

  • After May's Florence speech, Brexit talks face a tricky new moment
  • Internal divisions may not have been put entirely to rest

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Prime Minister Theresa May’s speech in Florence on Friday offered just enough in the way of concessions to be described as “constructive” by the EU’s chief negotiator, Michel Barnier. The fourth round of talks in Brussels this week will test how much further the U.K. is willing to bend.

May risked angering Brexit campaigners by asking for a two-year transition after the U.K. leaves the bloc in 2019, during which time rules and market access would remain the same and the U.K. would pay into the EU budget. She also made clear for the first time that the U.K. would honor its financial obligations more broadly, offering a way out of deadlocked talks.

Now comes the hard part. Brexit Secretary David Davis vowed on Sunday that the U.K. would pick through every line of the EU’s calculations of its divorce bill. 

He dismissed as “made up” an estimate of £40 billion ($54 billion) for the total settlement—a far more modest figure than the various sums floated by EU officials. May’s offer still falls way short of the demands made by some of those EU governments taking a harder line than the European Commission, Bloomberg’s Ian Wishart reports.

And just as there’s a chance to make some progress on talks, divisions in May’s Cabinet are again on display, with Foreign Secretary Boris Johnson reportedly ill at ease with the proposals set out in Florence. May will be hoping EU officials view those weekend reports as posturing rather than a serious threat to her leadership.

In any case, an initial deadline of getting EU leaders’ approval to move on to trade talks at a mid-October summit looks increasingly out of reach. If there had still been a chance, the German election result will put Angela Merkel in no mood to make concessions.

May in Florence.

Photographer: Chris Ratcliffe/Bloomberg

Brexit Latest

Ireland | One area where May offered no new ideas or leeway was on the Irish border. She may be asked why when she meets her counterpart, Leo Varadkar, in Downing Street on Monday. Separately, the Irish Stock Exchange is looking for a possible strategic alliance with another exchange to take advantage of post-Brexit opportunities, the Irish Times reports.

ECJ | May was vague about the role of the European Court of Justice in her Florence speech. Davis appeared to redraw the red line on Sunday, saying that the U.K. would leave the its jurisdiction in 2019. That’s another potential stumbling block for this week.

DExEU Churn | The hard numbers confirm what many had long suspected: Whitehall’s Brexit department isn’t very good at hanging on to its staff. The department has lost 124 employees since it was created, compared with a remaining staff of 482, according to the government’s reply to a freedom of information request by Bloomberg. The data exclude Oliver Robbins, who left the top job at DExEu to move to Downing Street.

Labour Evasion | The opposition Labour Party, as divided as the Tories over Brexit, won’t debate the issue at its conference in Brighton, in what could be a shrewd political calculation by leader Jeremy Corbyn. That didn’t stop Labour’s Brexit spokesman Keir Starmer writing in The Times that remaining in “a form of customs union” is a possible end destination for the party. Starmer speaks at the conference today.

Better Things | The EU is moving on. Aside from the officials specifically tasked with Brexit, the European Commission doesn’t even touch on the subject on a weekly basis, according to Commissioner Jyrki Katainen. They’ve got better things to do, the former Finnish prime minister said in an interview.

Markets | Moody’s cut the U.K.’s rating to its lowest ever just hours after May’s speech on Friday. It’s no longer confident the U.K. will get a replacement free-trade deal with the EU that mitigates the negative effect of the split. The pound weakened.

Bloomberg View | In Bruges in 1988 Margaret Thatcher spoke loudly and carried a big stick, recalls columnist Therese Raphael. Showing that she is no Thatcher, Theresa May on Friday spoke softly. There was no stick.

And Finally...

They voted for Brexit and are immune to its economic fallout. Over-50s travel company Saga Plc is seeing an increase in demand for cruise ship holidays, and CEO Lance Batchelor says his customers aren’t going to let economic concerns get in the way of a good time.

“These are people who have worked for 30 to 40 years, they’ve built up their savings pot and this is really their time to enjoy life, to travel, to spend time with grandchildren and to have fun,” Batchelor said. They “won’t hold back” because of concerns about the economy.

Leaving Brexit in their wake.
Photographer: Tim Boyle/Getty Images

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