Brexit Bulletin: ‘Difficult but Possible’

(Bloomberg) --

What’s Happening? Michel Barnier talks up the chances of a deal, but doesn’t make it sound easy. 

There are “serious” differences between the British and European positions, the bloc’s chief Brexit negotiaor, Michel Barnier, warned in Brussels today. But an agreement on a future relationship “is possible — even if difficult,” he said.

As he took stock of the first week of negotiations, Barnier took a moment to praise the U.K. civil servants working on the deal for their professionalism. That won’t have gone unnoticed in Downing Street, where the relationship between ministers and their officials has been strained to breaking point in recent months thanks to Home Secretary Priti Patel and Prime Minister Boris Johnson’s senior adviser Dominic Cummings.

Jabs at Johnson aside, Barnier was at pains to stress the talks were constructive — a sentiment echoed in London. At least both sides can agree on what they disagree on, if only because it’s the same list of issues as it always has been. (For the record, the “divergences” are on level playing field commitments, criminal justice, the governance of any future agreement, and fisheries.)

There were some early signs of movement — including a whiff of a compromise on fish, one of the most intractable parts of the whole negotiation — and evidence that the EU is firming up its lines of attack. Barnier said that the EU wants the U.K. to respect its sovereignty, just as the U.K. asks the same of the bloc. He also rebuffed calls from the British government to wrap up an early deal on access to the single market for London’s banks. The hint? Nice banking system you’ve got there. Wouldn’t want anything nasty to happen to it...

Constructive doesn’t mean the two sides are any closer to an agreement. And Johnson’s threat to walk away unless the EU compromises still lurks.

Beyond Brexit

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• Stock markets are having a wild time as virus fears grow, but only you know whether you should buy the dip.
• Israel has turned from an agricultural nation to a high-tech hub. That’s bad news for the Jaffa orange.

Brexit in Brief

Verge of Stagnation | Poor infrastructure across northern England is hampering business and helps keep economic productivity at its lowest ebb since the late 18th century. With Johnson about to embark on a bid to transform the economy of post-Brexit Britain, Lucy Meakin and David Goodman report on one tortuous journey that sums up the difficulty of getting things done outside of London. 

Explain Yourselves | A House of Lords committee triggered a clause in Brexit legislation compelling the U.K. government to defend its negotiating position in a formal debate within 14 parliamentary sitting days. 

Shutting Down? | Meanwhile, parliamentary officials are considering closing down the Palace of Westminster for months to face down the coronavirus threat, the Times reported. The proposal was denied by Leader of the House Jacob Rees-Mogg, who said “the public will expect parliament to sit and get on with its job.”

Cultural Shift | The U.K. can become an “unashamedly pro-tech nation” after Brexit, that will look to “innovate and create wealth and prosperity through the use of data,” Culture Secretary Oliver Dowden said in his first major public speech.

Dose of Reality | The prospect of a free-trade deal with the U.S. has long been touted as a prize of Brexit. But President Donald Trump’s “big” trade offer is actually pretty puny, and it’s looking less impressive the closer it gets, Therese Raphael argues for Bloomberg Opinion.

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To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Caitlin Morrison

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