Brexit Bulletin: ‘The Moment of Truth’

(Bloomberg) -- Today in Brexit: As all eyes turn to Salzburg, the Prime Minister is told that next month is the real test.

On the eve of this week’s crucial summit, the European Union’s chief Brexit negotiator is already heaping pressure on the next one.

Speaking ahead of the meeting of EU leaders in Salzburg, Michel Barnier told U.K. Prime Minister Theresa May that while talks may be in the home stretch, substantial progress is needed next month if there’s to be a deal.

“October will be the moment of truth,” Barnier said. “It’s then we will see whether the agreement we’re hoping for will be within our grasp.”

Brexit Bulletin: ‘The Moment of Truth’

The gathering in Austria is the first time EU leaders have sat down to discuss Brexit since June. They will meet again in October, and the question of whether to hold a further meeting in November to sign off on a deal is likely to be on the agenda. While that deadline is now an open secret in Brussels, the EU wants to keep the pressure on the U.K. throughout October.

That was clear from comments from Irish Foreign Minister Simon Coveney following his meeting with Barnier earlier Tuesday.

“Some people seem to be suggesting that we can just move past the leaders’ meeting in October and into November,” Coveney told reporters. “That is not the view of Ireland. We want to see substantial progress.”

Small Window

Time is running short. The U.K.’s likely window for negotiations is sandwiched between the Conservative party conference in Birmingham starting at the end of this month and the summit in Brussels less than three weeks later. The major obstacle of how to keep an invisible Irish border after Brexit is still unresolved.

Still, both sides are signaling their readiness to work to break the deadlock. On Tuesday, Barnier repeated his offer to rewrite his blueprint for avoiding a policed border. And over dinner with her fellow EU leaders on Wednesday, May will insist she’s committed to reaching an agreement if better terms are proposed, according to a senior U.K. official.

May also sounded a more positive note in an interview with the Daily Express Wednesday, in which she said that “the withdrawal agreement is virtually agreed” and, once again, ruled out the prospect of second referendum.

Today’s Must-Reads

  • As Brexit dominates the government’s time, little else is getting done. Bloomberg’s Jess Shankleman, Alex Morales and Suzi Ring take a deep dive into “neglexit” and how it’s leaving the rest of the U.K. stuck in political and bureaucratic torpor.
  • As the summit in Salzburg gets under way, Bloomberg’s Emma Ross-Thomas and Ian Wishart have produced a guide to what to expect. The key takeaway? With EU leaders focused on bolstering May’s position at home, there’s a good chance that headlines will paint a slightly rosier picture of the state of negotiations than the reality.

Brexit in Brief

London Calling | While the financial world has focused on bankers leaving London for the continent due to Brexit, the divorce will send some jobs the other way as well. That means Amsterdam’s speed traders could be heading to the U.K., Bloomberg’s Will Hadfield reports.

Production Brake | BMW is bringing forward the scheduled maintenance of its Oxford plant to coincide with the day the U.K. is slated to leave the EU, joining a lengthening list of companies making contingency plans for a no-deal scenario. The shutdown will be advanced from the summer months for 2019, partly due to Brexit, a spokeswoman for the company said, confirming an earlier report from Sky News.

Migration Report | The U.K. shouldn’t favor EU workers in the post-Brexit labor market, the government’s immigration adviser said, urging ministers to prioritize skilled workers who bring clear benefits to the economy

Business Call | Chuka Umunna, the Labour politician leading calls for a second referendum, says U.K. business leaders have a “patriotic duty” to warn shareholders and staff of the risks facing their companies from a no-deal Brexit. Speaking of a second referendum, campaigners are today launching a report titled “The Roadmap to a People’s Vote.” It details a route toward giving the British people another say.

Police Problems | Catching criminals after Brexit will be harder, according to the U.K. police, who say officers will have to revert to older and more bureaucratic methods to trace international criminals if they lose access to EU data-sharing systems.

Not So Green | The U.K.’s richest citizens are too worried about Brexit to invest sustainably, according to a report by UBS. While Britain is one of the global leaders in green energy, its high net worth investors are lagging behind the rest of the world, the bank said. 

On the Markets | Some of the world’s biggest fund managers say the fate of investments into battered European equities lies in May’s hands. Any signs of progress in talks this week would boost investor confidence that the deal will soon be reached and may fuel inflows into European and U.K. stocks, according to State Street Global Advisors.

Brexit Bulletin: ‘The Moment of Truth’

Coming Up | The EU leaders’ summit kicks off with a dinner in Salzburg this evening. Before that, in London, May is due to make a speech on housing and the Office for National Statistics releases U.K. inflation data for August. 

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