EU Economic and Financial Affairs Commissioner Pierre Moscovici is “neither ‘hard’, nor ‘soft'” when it comes to the UK.
He is, in his own words, “amicable and firm.”
Which we suppose is one way to go about dealing with a “bloody difficult woman.”
No, but seriously, the UK will enter Brexit negotiations this week in the worst imaginable position. Here’s a useful summary of the situation from The Independent:
This week, the formal talks over the UK’s EU withdrawal will begin and the Government finds itself negotiating from a position that ministers could barely have envisaged in their worst nightmares. Theresa May’s decision to call a snap election in April could not have backfired more spectacularly. Plainly she does not have the “Brexit mandate” she sought. But worse than that, she does not even have a mandate to govern the country, reliant instead on the whims of the Democratic Unionist Party. The knives are out within her own party. It is entirely conceivable, likely even, that we will see a Conservative leadership contest — and perhaps another general election — before long.
As if all this did not augur badly enough for the PM and her Cabinet, Britain has suffered a series of blows that could rock any government. The terror attacks in Manchester and London not only brought death and destruction on a scale not seen here for more than a decade, they have also raised significant questions about national security — an issue which for a long time the relevant agencies had successfully kept low down on the agenda of public debate. Theresa May’s previous leadership of the Home Office had been seen as a strength; suddenly it is a weakness.
The Prime Minister’s position has been further damaged by the devastating fire in west London last week, which left dozens dead, hundreds without a home and many thousands seething with anger. It is a tragedy that requires urgent investigation for its own sake, of course. But it has also come to be seen as a symbol of the inequality that has insidiously pervaded Britain and that the present Government appears either not to understand or wishes to disregard. Ms May’s personal response to the catastrophe, not least in failing to meet victims at Grenfell Tower, was wholly inadequate and has deepened the perception that she is out of touch with the people she both leads and serves.
Simply put, this is a fucking nightmare and thanks to her misguided decision to call for elections in an bungled effort to secure a stronger Brexit mandate, Theresa May now finds herself in a completely untenable position.
For some further context, consider the following headlines that have hit over the past 48 hours…
Via Bloomberg
- May Under Threat as ‘Remainers’ Said to Prepare Rudd Bid: Times
- U.K. Prime Minister Theresa May has 10 days to save her leadership and faces the threat of rival leadership bids, says the Times, citing unidentified sources.
As many as a dozen MPs are ready to demand a vote of no- confidence in their leader - “The critical moment is June 28 and 29, when there are votes on the Queen’s speech,” says one former minister
- Constituency party bosses have called on ministers and MPs to force May from power, the paper says
- Both Foreign Secretary Boris Johnson and Brexit Secretary David Davis’ teams are “on maneouvres,” while leading Remain backers aim to have a candidate in place by next week, likely Home Secretary Amber Rudd, says the Times
- May Faces ‘Stalking Horse’ Leadership Challenge: Telegraph
- U.K. Prime Minister Theresa May faces the threat of a leadership challenge if she deviates from her hard Brexit stance, senior Tories told The Sunday Telegraph.
- Any attempt to keep Britain in the customs union or single market will trigger an “overnight coup,” the Euro-skeptic MPs said
- “If we had a strong signal that she were backsliding, I think she would be in major difficulty,” one former minister told the paper
- Senior figures say they would put up a challenger to weaken May’s position, likening the plot to Anthony Meyer’s 1989 bid for leadership when Margaret Thatcher was in office
That’s the backdrop for what promises to be a very – very – arduous journey out of the EU.
The tone of the negotiations, which start on Monday, will be watched closely by currency markets.
“Sterling’s volatility should be much higher than what we have right now and people are a bit too complacent,” SEB’s Richard Falkenhall told Bloomberg over the weekend.
“There is a chance Brexit could turn ugly,” Robeco’s portfolio manager Jeroen Blokland added, explaining why he’s now long the euro against sterling.
To be sure, this process was already going to be convoluted enough without the latest political turmoil.
In order to illustrate just how convoluted, we present the following flow chart from Barclays. We think you’ll agree that despite the bank’s valiant effort to summarize things in one handy visual aid, it raises more questions than it answers…
What can we say but: “good luck with that.”
******
