Search ForexCrunch

Christopher Graham, economist at the Standard Chartered Bank point out the prospect of a deal between the United Kingdom and the European Union are 50:50 at best. He sees UK-EU talks could collapse in June given lack of progress and focus on Northern Ireland protocol. 

Key Quotes: 

“A fourth round of talks will begin on 1 June, the final set before a high-level stock-taking exercise is due later in the month. Crucially, these will also be the last set of talks before the end-June deadline on deciding whether to extend the transition period, currently set to conclude at end-2020.”

“Given recent statements from the UK government, we think it is highly unlikely a request for an extension will be made by the end-June deadline. Recall also that it was written into UK domestic legislation by the government that no minister could request such an extension. As a result, it would take a separate piece of legislation to be passed through UK Parliament, requiring the support of many Conservative MPs, to overturn this legislation and allow an official request to be made.”

We also see a distinct possibility that talks could break down at some point in June. There has been some progress on fishing rights, as recent reports suggest the EU could abandon its ‘maximalist’ approach, in which it aims to maintain status quo access arrangements for EU fishing vessels. But on issues such as the role that the European Court of Justice (ECJ) would play in future disputes, and level playing field (LPF) provisions such as environmental standards, competition policy, state aid, workers’ rights, and tax policy, both sides remain far apart.”