Two pieces of leaked news regarding Brexit have seen the pound rise to US $1.32 today. The first, reported in yesterday’s Times, was that agreement had been reached by the EU and the UK on financial services after Brexit. Nice, when it happens but of no immediate relevance. Any future relationship between the UK and the EU will have to be negotiated after Brexit. For now, the urgency is about the terms on which the UK leaves the EU and its position during the transition period after exit day while the new trade treaty is being negotiated with the EU. The withdrawal agreement covers: the position of EU citizens in the UK on exit day and the position of UK citizens in EU member states on exit day; the ‘divorce’ settlement to be paid by the UK; the avoidance of a hard border on the island of Ireland; the role of the CJEU in supervising the withdrawal treaty. It is the third of these that is proving most problematic.
Today’s news that the EU may be prepared to compromise on this issue is certainly of immediate relevance. The Financial Times reports that the E.U. is ready to offer the UK a “bare-bones” U.K.-wide customs union with the E.U. in the event of the Irish backstop being triggered.
But getting a withdrawal treaty agreed with the EU is one thing. Getting it through the UK Parliament is another.