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Brexit Bulletin: Blackmail and Backsliding

Brexit Bulletin: Blackmail and Backsliding

(Bloomberg) --

What’s Happening? We’re just days away from knowing what the next few months of argument will actually be about.

Don’t blackmail us just because you want a deal at any cost, France’s foreign minister warned the U.K. There can be no backsliding on what has already been agreed, said the (outgoing) Irish prime minister.

The twin warnings weren’t directly linked, but taken together they illustrate neatly how tense the atmosphere around Brexit has suddenly become. The U.K. and EU are each on on the verge of unveiling their negotiating mandates for the next phase of talks. Negotiations on the structure of the future relationship are due to begin next week and will determine what happens once the 11-month transition period ends on Dec. 31 this year.

In Brussels, ministers from the EU’s 27 national governments are expected to sign off on their mandate on Tuesday, Bloomberg’s Ian Wishart reports, a compromise that sets parameters on issues such as trade, security and financial services. France is pushing for stronger language to force Britain to follow EU rules or common standards in future—which the U.K. government has ruled out. Europe Minister Amelie de Montchalin made her view clear on Monday morning. 

In London, where the British negotiating mandate is expected on Thursday, the argument of the day was less about what might be agreed in future and more about whether the U.K. would honor the terms it agreed to in the Withdrawal Agreement, signed just a few months ago.

The U.K. will not ask ports to prepare for new checks on goods moving between Britain and Northern Ireland, Prime Minister Boris Johnson’s spokesman said this morning. That’s a move likely to raise fears on the continent that the prime minister is trying to back away from promises made to secure the divorce, Tim Ross and Robert Hutton report. And, as trade expert Dmitry Grozoubinski points out, it carries risks for the upcoming talks. 

But the U.K. may not be  prioritizing a trade deal by the end of the year. As Johnson’s spokesman James Slack told reporters in London on Monday, the U.K. will “comply with our obligations.” But, he added: “The U.K.’s primary objective in the negotiations is to ensure we restore economic and political independence on Jan. 1, 2021.” 

Beyond Brexit

Brexit in Brief

Red Tape Warning | Brexit could increase the costs of doing business as companies strive to meet diverging European and British standards, the Confederation of British Industry warned in a new report. And it could lead to some pretty unusual consequences, as Joe Mayes reports. Nicole Sykes of the CBI discussed the report on today’s Bloomberg Westminster podcast.

Prices Rising? | Boris Johnson’s ambition to “level up” the U.K. by investing in regions away from London and the southeast is an inflation risk, according to Bloomberg Economics.

Priti Angry | A row over bullying in the Home Office, the U.K. government department responsible for policing, and immigration, prompted a stern denial of “false allegations appearing in the media” concerning Home Secretary Priti Patel. The Sunday Times reported that the security service MI5 had reduced the volume of intelligence shared with the home secretary.

Gloomsters | Almost half of British boards expect Brexit to damage their businesses, according to a survey of FTSE 350 companies backed by the Financial Times.

On Your Marks | Ballot papers are out and the voting is finally underway in the Labour leadership contest. Keir Starmer, Rebecca Long-Bailey and Lisa Nandy are bidding to succeed Jeremy Corbyn. The result will be known in early April, almost four months after Labour slumped to defeat in December’s general election.

Want to keep up with Brexit?

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To contact the editor responsible for this story: Guy Collins at guycollins@bloomberg.net

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