Connect with us

Brexit

Offering UK a #Brexit choice, Labour's #Corbyn stays shy on his view

Published

on

Opposition Labour leader Jeremy Corbyn promised on Wednesday (18 September) to offer Britain the choice of leaving the European Union with a “credible” deal or staying in the bloc if he wins power, but declined to say which side he favoured, write Guy Faulconbridge and Elizabeth Piper of Reuters.

With an early election increasingly likely in Britain to break the country’s deadlock over Brexit, Corbyn, an instinctive critic of the EU, has come under pressure from many in his party to unequivocally back remaining in the bloc.

But some in the Labour leader’s team fear the party will lose the support of Brexit backers in places such as northern England, voters who could be crucial for any victory at an election that could come before the end of the year.

Less than seven weeks before Prime Minister Boris Johnson has vowed to take Britain out of the EU “do or die”, the main parties are setting out their positions on everything from Brexit to domestic policy in anticipation of that poll.

Setting out his stance before his party heads to the southern English seaside resort of Brighton for its annual conference, Corbyn said he was the only candidate for prime minister who was offering Britain “a credible choice”.

“My job as prime minister would be to deliver that option that is chosen by the British people,” he told reporters, saying the party would offer voters the choice between leaving with a Labour-negotiated deal to protect jobs or to remain in the EU, “possibly with some reforms”.

But asked which option he preferred, Corbyn declined to comment, saying: “I think the important thing is to put the offer before the people and they will make the choice and I will deliver it.”

Johnson, a figurehead for the campaign to leave the EU at the 2016 referendum, has vowed to force through Brexit by the latest deadline of 31 October with or without a deal.

Corbyn, along with other opposition leaders, has tried to prevent a no-deal Brexit by forcing the government to delay Britain’s departure without an agreement and by voting against holding a new election before that option had been blocked.

But the Labour leader, who was criticized for being a lacklustre campaigner for remaining in the EU at the 2016 referendum, has come under pressure to firm up his position and back staying in the bloc in any second referendum.

He has so far been reluctant to do so, fearful of losing votes and possibly aware that the route to a second referendum on Britain’s membership of the bloc is far from simple.

Brexit

Brexit - European Commission gives market participants 18 months to reduce their exposure to UK clearing operations

Published

on

The European Commission has today (21 September) adopted a time-limited decision to give financial market participants 18 months to reduce their exposure to UK central counterparties (CCPs). The deadline is the clearest sign that the EU intends to move the 'clearing' business out of London and into the eurozone.

The move will come as a blow to London, which is the current world leader in clearing a business worth several billion. The London Clearing House (LCH), clears nearly a trillion euro-worth of euro-denominated contracts a day, and accounts for three-quarters of the global market. Clearing offers a way of mediating between buyers and sellers, it is thought by having a larger clearing business the costs of transactions are reduced. When the European Central Bank in Frankfurt tried to insist that all euro trades were done inside the eurozone this was challenged successfully in the European Court of Justice by George Osborne, then the UK Chancellor of the Exchequer.

In the past the London Stock Exchange has warned that up to 83,000 jobs could be lost if this business were to move elsewhere. There would also be spillovers to other areas such as risk management and compliance.

An Economy that Works for People Executive Vice President Valdis Dombrovskis (pictured) said: “Clearing houses, or CCPs, play a systemic role in our financial system. We are adopting this decision to protect our financial stability, which is one of our key priorities. This time-limited decision has a very practical rationale, because it gives EU market participants the time they need to reduce their excessive exposures to UK-based CCPs, and EU CCPs the time to build up their clearing capability. Exposures will be more balanced as a result. It is a matter of financial stability.”

Background

A CCP is an entity that reduces systemic risk and enhances financial stability by standing between the two counterparties in a derivatives contract (i.e. acting as buyer to the seller and seller to the buyer of risk). A CCP's main purpose is to manage the risk that could arise if one of the counterparties defaults on the deal. Central clearing is key for financial stability by mitigating credit risk for financial firms, reducing contagion risks in the financial sector, and increasing market transparency.

The heavy reliance of the EU financial system on services provided by UK-based CCPs raises important issues related to financial stability and requires the scaling down of EU exposures to these infrastructures. Accordingly, industry is strongly encouraged to work together in developing strategies that will reduce their reliance on UK CCPs that are systemically important for the Union. On 1 January 2021, the UK will leave the Single Market.

Today's temporary equivalence decision aims to protect financial stability in the EU and give market participants the time needed to reduce their exposure to UK CCPs. On the basis of an analysis conducted with the European Central Bank, the Single Resolution Board and the European Supervisory Authorities, the Commission identified that financial stability risks could arise in the area of central clearing of derivatives through CCPs established in the United Kingdom (UK CCPs) should there be a sudden disruption in the services they offer to EU market participants.

This was addressed in the Commission Communication of 9 July 2020, where market participants were recommended to prepare for all scenarios, including where there will be no further equivalence decision in this area.

Continue Reading

Brexit

EU's Barnier still hopes trade deal with Britain possible, sources say

Published

on

By

The European Union’s Brexit negotiator told the bloc’s 27 national envoys to Brussels that he still hoped a trade deal with Britain was possible, stressing that the coming days would be decisive, diplomatic sources with the bloc told Reuters, write and

Michel Barnier addressed the gathering on Wednesday (16 September) and the three sources either participated in the discussion behind closed doors or were briefed on its content.

“Barnier still believes a deal is possible though the next days are key,” said one of the EU diplomatic sources.

A second diplomat, asked what Barnier said on Wednesday and whether there was still a chance for a new agreement with the UK, said: “The hope is still there.”

The first source said tentative concessions offered by the UK on fisheries - a key point of discord that has so far prevented agreement on a new EU-UK trade deal to kick in from 2021 - were “a glimmer of hope”.

Reuters reported exclusively on Tuesday (15 September) that Britain has moved to break the deadlock despite that fact that publicly London has been threatening to breach the terms of its earlier divorce deal with the bloc.

A third source, a senior EU diplomat, confirmed the UK offer but stressed it was not going far enough for the bloc to accept.

Brexit talks descended into fresh turmoil this month over Prime Minister Boris Johnson’s plans to pass new domestic laws that would undercut London’s earlier EU divorce deal, which is also aimed at protecting peace on the island of Ireland.

US Democratic presidential candidate Joe Biden warned Britain that it must honour the Northern Irish peace deal as it extracts itself from the EU or there would be no US trade deal for the United Kingdom.

The third EU source, who spoke under condition of anonymity, said that the bloc would take a more rigid line in demanding a solid dispute settlement mechanism in any new UK trade deal should Johnson press ahead with the Internal Market Bill.

“There is unease about what Britain is doing but Barnier has stressed he will keep negotiating until his last breath,” said a fourth EU diplomat, highlighting the bloc’s wariness about being assigned blame should the troubled process eventually fail.

Asked about an estimate by Societe Generale bank, which put at 80% the probability of the most damaging economic split at the end of the year without a new deal to carry forward trade and business ties between the EU and the UK, the person said:

“I would put it around the same mark.”

Barnier is due to meet his UK counterpart, David Frost, around 1400 GMT in Brussels on Thursday.

Continue Reading

Brexit

Biden warns UK on #Brexit - No trade deal unless you respect Northern Irish peace deal

Published

on

By

US Democratic presidential candidate Joe Biden warned the United Kingdom that it must honour the Northern Irish peace deal as it extracts itself from the European Union or there would be no US trade deal, write and

“We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit,” Biden said in a tweet.

“Any trade deal between the US and UK must be contingent upon respect for the Agreement and preventing the return of a hard border. Period.”

Johnson unveiled legislation that would break parts of the Brexit divorce treaty relating to Northern Ireland, blaming the EU for putting a revolver on the table in trade talks and trying to divide up the United Kingdom.

He says the United Kingdom has to have the ability to break parts of the 2020 Brexit treaty he signed to uphold London’s commitments under the 1998 peace deal which ended three decades of sectarian violence in Northern Ireland between pro-British Protestant unionists and Irish Catholic nationalists.

The EU says any breach of the Brexit treaty could sink trade talks, propel the United Kingdom towards a messy exit when it finally leaves informal membership at the end of the year and thus complicate the border between Northern Ireland and EU-member Ireland.

The EU’s Brexit negotiator told the bloc’s 27 national envoys that he still hoped a trade deal with Britain was possible, stressing that the coming days would be decisive, three diplomatic sources told Reuters.

Michel Barnier addressed the gathering on Wednesday and the three sources either participated in the discussion behind closed doors or were briefed on its content.

“Barnier still believes a deal is possible though the next days are key,” said one of the EU diplomatic sources.

Johnson told The Sun that the EU was being “abusive” to Britain and risking four decades of partnership.

He said the UK must “ring-fence” the Brexit deal “to put in watertight bulkheads that will stop friends and partners making abusive or extreme interpretations of the provisions.”

Societe Generale analysts said on Thursday they now see an 80% chance that Britain and the EU will fail to strike a trade deal before the end of the year.

Biden, who has talked about the importance of his Irish heritage, retweeted a letter from Eliot Engel, chair of the Foreign Affairs Committee of the US House of Representatives, to Johnson calling on the British leader to honour the 1998 Good Friday peace deal.

Engel urged Johnson to “abandon any and all legally questionable and unfair efforts to flout the Northern Ireland protocol of the Withdrawal Agreement.”

He called on Johnson to “ensure that Brexit negotiations do not undermine the decades of progress to bring peace to Northern Ireland and future options for the bilateral relationship between our two countries.”

Engel said Congress would not support a free trade agreement between the United States and the United Kingdom if Britain failed to uphold its commitments with Northern Ireland.

The letter was signed by Representatives Richard Neal, William Keating and Peter King.

Johnson is pushing ahead with his plan.

His government reached a deal on Wednesday (16 September) to avert a rebellion in his own party, giving parliament a say over the use of post-Brexit powers within its proposed Internal Market Bill that breaks international law.

Continue Reading
Advertisement

Facebook

Twitter

Trending