Daily Management Review

Phase Two Of Brexit Talks, Announced On Friday, Would Be Tough, Analysts Say


12/15/2017




Tarde talks and the transition period will primarily feature in the second round of Brexit negotiations between UK and EU and it was formally announced by the EU leaders on Friday.
 
"The European Council ... decides that it is sufficient to move to the second phase related to transition and the framework for the future relationship," EU leaders said Friday, following a two-day summit in Brussels.
 
The negotiations would begin in March and in the intermediate period, negotiating teams from both sides would prepare for the talks.
 
While speaking at a summit dinner in Brussels, Belgium, on Thursday, British Prime Minister Theresa May was given a round of applause by European leaders.
 
Because of the fact that some "thought that indeed she did a big effort" to conclude phase one of the negotiations and "this needs to be recognized", May was applauded, said European Commission President Jean-Claude Juncker.
 
However, analysts say that for May, Brexit talks could now become more difficult.
 
"I expect very, very tough negations," Zsolt Darvas, senior fellow at the Brussels-based think-tank Bruegel, said.
 
The potential future of the financial industry would be one of the aspects that would dominate the negotiations. "At the end, I think that access to financial services will be limited for U.K.-based firms and therefore a number of companies will relocate to the continent," Darvas said.
 
The financial companies now operating from London do not require any form of authorization form respective EU member states to do business in the respective countries due to what is described as the passporting rights. Analysts are of the opinion that after completion of Brexit, there would be limitation to this right.
 
"I think there's a strong willingness from the 27 to have a relatively free trade deal, but for services, especially financial services. EU leaders have said there's not going to be cherry picking," Darvas said.
 
"Thereby, the U.K. gets access to the financial markets of Europe, but at the same time the U.K. won't accept European citizens to go and work in the U.K. as they currently do freely."
 
UK was also given an open door invitation to remain within the EU despite the ongoing negotiations by EC President Junckerv while speaking on Friday.
 
"That depends on the British parliament and the British people," he said. "It's not up to us to decide what the British have to do."
 
March 29, 2019 is the date that the U.K. would formally discontinue its membership of the EU. And that is the ultimate date that has to be kept in mind by the negotiators to end the trade talks, come to an agreement on a transition period, and get a number of resolutions passed in parliaments of multiple countries.

(Source:www.cnbc.com)






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