Mon | Aug 21, 2017

EU welcomes clarity from May, PM proposes clean Brexit break

Published:Wednesday | January 18, 2017 | 1:00 AM
Britain's Prime Minister Theresa May delivers a speech on leaving the European Union at Lancaster House in London, Tuesday, January 17, 2017. (AP Photo/Kirsty Wigglesworth, pool)

European Union President Donald Tusk has called United Kingdom Prime Minister Theresa May's speech on Brexit "at least a more realistic announcement" than the months of waffling and unclear messages that have come after the June 23 vote to leave the bloc.

Tusk called the divorce proceedings between Britain and the EU a "sad process, surrealistic times" in a Twitter posting on Tuesday. And he insisted that the 27 other EU nations will be "united and ready to negotiate" when May triggers the Brexit talks at the end of March.

May on Tuesday said Britain will make a clean break from the EU and leave its single market of around 500 million people in order to regain control of its borders and laws.

Germany's foreign minister, Frank-Walter Steinmeier, also welcomed May's speech, saying it has "created a little bit more clarity about the British plans" and noted May's willingness to engage in a constructive and positive partnership with the EU.

Steinmeier said in a statement on Tuesday that the other 27 countries, too, want "good, close and trusting relations" with Britain and will aim for constructive negotiations.

But he insisted that talks about the so-called Brexit won't begin until London has formally notified the EU of its wish to leave the bloc.

Chancellor Angela Merkel is due to meet with her ministers for the first time today, Wednesday to discuss Germany's position on Brexit.

CALL FOR BENEFICIAL TRADE

May said on Tuesday that Britain must regain control of its laws and borders, even as she called on the bloc to negotiate a free-trade agreement that will benefit both sides.

"We do not seek membership of the single market," she said in a highly anticipated speech. "Instead, we seek the greatest possible access to it through a new, comprehensive, bold and ambitious free-trade agreement."

May hopes the offer of a mutually beneficial deal is one the EU cannot refuse. She argued that a "cliff edge for business or a threat to stability" is good for neither Europe nor Britain.

"I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path," she said. "That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend."

May promised for the first time that Britain's Parliament would be able to vote on the final divorce deal reached between the UK and European Union likely in 2019. However, she did not address what would happen should Parliament reject the agreement.

The British pound rallied on having some clarity at last. The currency was recovering from steep losses earlier in the week, trading 2.2 per cent higher at US$1.2309. On Monday, it was as low as US$1.20, a near 31-year low.

Currency traders liked that the matter would be put to Parliament, giving May a chance to tame the excesses of the more fervent Brexiteers, said Kathleen Brooks, research director of City Index.

"But even this concession cannot hide the fact that the UK wants the best parts of the EU, with a cherry on the top, which could make the next two years extremely tense," she said. "So, the pound is not out of the woods yet."

The pound's plunge earlier this week was sparked by fears of an economy-roiling 'hard Brexit'.

May rejected both the 'hard Brexit' label and its opposite, a compromise 'soft Brexit', saying she wants a new relationship based on free trade between the UK and the EU.

"We want to buy your goods, sell you ours, trade with you as freely as possible, and work with one another to make sure we are all safer, more secure and more prosperous through continued friendship," May said.

That includes a customs agreement, though May said she has an "open mind" about whether that means staying in the EU Customs Union, which currently prevents Britain from striking trade deals with other countries. Alternatively, Britain could leave that, too, and try to forge a new deal with the EU.

Britain is quitting the EU's single market in goods and services in order to gain control over immigration a key issue for many voters who backed Brexit. EU leaders say Britain can't stay in the single market without allowing free movement of people from the bloc.

In her remarks, May suggested that punitive action wasn't good for either the EU or Britain. Treasury chief Philip Hammond has suggested that the country would consider offering a break on corporation taxes if necessary, to encourage investment.

Labour leader Jeremy Corbyn said she appeared to be warning that she was ready to turn the UK into a "low-corporate taxation, bargain basement economy off the shores of Europe" if the EU didn't give her everything she wanted.

"She makes out this is a negotiating threat to the 27 EU countries, but it's actually a threat to the British people's jobs, services and living standards," Corbyn said.