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James Smith, Developed Markets Economist at ING, suggests that even if a more flexible EU approach were to prevail with regards to Brexit, this assumes the UK government can get behind the proposal in the first place – and there’s no guarantee that will be the case in the coming Friday’s meet.

Key Quotes

“For the likes of Foreign Secretary Boris Johnson and International Trade Secretary Liam Fox, May’s proposal could be unacceptable. The idea of becoming a rule-taker would be incompatible with the Leave campaign mantra of “taking back control”. Brexiteers also argue this would tie the government’s hands when it comes to negotiating access for services.”

“Then there are the obligations that single market membership – even if only partial – would involve. Budget contributions, European Courts of Justice oversight, as well as some form of free movement of people, to name just three. While the EU might ultimately agree to a fudge for some of these issues – payments could be made under the guise of aid payments for instance, while the EFTA court model has been suggested as a possible ECJ middle ground – Brexit-supporting ministers are unlikely to accept this.”

“Some high-profile ministerial resignations, therefore, shouldn’t be ruled out over the next few weeks, although whether this would be enough to topple the Prime Minister is not so clear.”