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Brexit Officially Begins: EU Receives Article 50 Notice From The UK; What Happens Next
From Tyler Durden / ZeroHedge
http://www.zerohedge.com/news/2017-03-29/brexit-officially-begins-eu-receives-article-50-notice-uk-what-happens-nextThere is no going back now: moments ago the EU’s Donald Tusk received the signed Brexit notification letter from the UK’s envoy Tim Barrow, officially triggering two-year countdown to British withdrawal from EU and marking the first ever withdrawal of an EU member state in its 60-year history.
Tim Barrow to Donald Tusk :”Here’s our notice – you glorified asshole”Commemorating the event, Theresa May said this is “a historic moment from which there can be no turning back.”
And it appears Mark Cudmore may have been right that the official start of Brexit may be bullish for cable, prompting the cover of record sterling short:
Speaking to Parliament over this historic event, Theresa May said that the move would implement “the democratic will” of the people of the United Kingdom who voted to leave the EU.
Tim Barrow, the UK’s EU ambassador, delivered a letter to Donald Tusk, president of the European Council in Brussels, invoking Article 50 of the Lisbon Treaty, nine months after Britain voted in a referendum to leave the bloc. “After nine months the UK has delivered”, said European Council president Donald Tusk.
May will inform MPs of her negotiating priorities for the next two years of Brexit talks. The prime minister is expected to strike a moderate tone, after ministers have signalled in recent days that she is increasingly open to compromise in order to prevent Britain’s 44-year relationship with the EU ending in acrimonious divorce.
The prime minister informed the cabinet of the letter’s contents at a specially-convened meeting on Wednesday morning. Speaking shortly before that meeting, chancellor Philip Hammond told the BBC that “we are going to get a deal” with the EU, the FT reported.
Mr Hammond also indicated that the government would regard the completion of negotiations with the EU in 2019 as the cut-off date for the rights of EU nationals living in the UK. It had been suggested that the UK could treat the triggering of Article 50 as its cut-off date.
How does the exit process work?
Article 50 of the Lisbon Treaty, the EU’s guiding document, details how a country leaves the bloc. It’s never been activated and is only about 260 words long. It gives the departing country up to two years to negotiate “its future relationship with the Union.” So Britain will be out of the bloc by April 2019.
When did the two-year clock start ticking?
It starts on Wednesday afternoon 29th March 2017 when the U.K.’s envoy to the EU, Tim Barrow, hands EU President Donald Tusk a letter from May formally invoking Article 50. May will address the U.K. Parliament about the same time. The delay since the referendum was caused by May, who insisted she needed time to form a negotiating team and take a position. Then the U.K. Supreme Court ruled that she didn’t have the authority to trigger Article 50 by herself, forcing her to obtain permission from Parliament. A law was then passed on March 16 to allow the prime minister to act.
How quickly will talks start?
Tusk will read out a statement at 1:45 p.m. in Brussels on Wednesday, a move that may give some clarity. He has indicated the EU will respond within 48 hours by publishing draft guidelines for Michel Barnier, the European Commission’s chief negotiator. EU leaders will convene a summit on April 29 to sign off on those. Officials have said the bloc may wait until June to fully engage although September elections in Germany will be a distraction.
What will May push for?
She intends to pull the U.K. out of the single market for goods and services — a “hard” Brexit that prioritizes securing control of immigration, laws and her budget over economic concerns. May wants the “best possible deal” for trading with the bloc although she seeks the liberty she now lacks to negotiate trade deals with non-EU countries such as the U.S.
What will Europe demand?
The remaining EU members don’t want the U.K. to “cherry pick” the benefits of membership with none of the responsibilities (like agreeing to the free movement of people) for fear it will encourage others to leave as well. Many European countries are going to seek a guarantee of the rights of their citizens already living in Britain.
May wants the same for Britons living abroad and says this is an issue to resolve early on. Ireland, an EU member, says it will fight any attempt to restore a so-called hard border with Northern Ireland, which is part of the U.K. Then there’s the question of the bill the U.K. will be asked to pay.
Wait — there’s a bill?
The EU says there is. Barnier has indicated he wants the British to cover budget commitments they agreed to, pensions promised to EU officials from the U.K., guarantees on loans such as the bailout of Ireland and pending infrastructure projects. Juncker says the sum in question is about 50 billion pounds ($63 billion). British Trade Secretary Liam Fox rejected the notion of a bill as “absurd” and Brexit Secretary David Davis said the amount will be “nothing like” the sums floated. A House of Lords panel also questioned whether the U.K. is under any legal obligation to pay.
Still, EU officials say they won’t discuss the trade deal May is after until the issue is resolved. They may also be willing to force the issue in front of the International Court of Justice. Such threats mean May might agree to contribute something, although a big check would draw ire domestically.
Why does all this matter for the rest of the world?
French presidential candidate Marine Le Pen is running on a Brexit-like platform of euro-skepticism. In the U.S., President Donald Trump’s administration has registered its dislike of multilateral organizations like the EU and may be tempted to offer the U.K. a generous free-trade deal.
Russian President Vladimir Putin will likely welcome anything that divides and distracts the EU. China will be following closely to see if the U.K. remains an attractive investment partner as it raises barriers with the rest of the EU.
There are a wide spectrum of countries eager to sign bilateral trade and military agreements with the UK.
Scotland and Ireland have indicated need for referendums to remain in the EU and leave the UK.
Full text here
http://www.zerohedge.com/news/2017-03-29/brexit-officially-begins-eu-receives-article-50-notice-uk-what-happens-next
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