UK plays Brexit hardball with EU

FASLANE, Scotland, July 29 

Sterling tumbled to a 28-month low on Monday as Prime Minister Boris Johnson said the Brexit divorce was dead and warned that unless the European Union renegotiated, Britain would leave on October 31 without a deal.

Many investors say a no-deal Brexit would send shock waves through the world economy, tip Britain’s economy into a recession, roil financial markets and weaken London’s position as the pre-eminent international financial centre.

The pound, which was trading at $1.50 on the day of the 2016 referendum, dropped more than a cent to $1.22 on no-deal fears, the lowest level since March 16, 2017. Sterling has fallen more than two cents since Johnson was named leader.

Johnson’s bet is that the threat of a disruptive no-deal Brexit will persuade the EU’s biggest powers — Germany and France — to agree to revise the Withdrawal Agreement that Theresa May agreed but failed three times to push through the British Parliament.

“The Withdrawal Agreement is dead, it’s got to go. But there is scope to do a new deal,” Johnson told reporters in Faslane, Britain’s nuclear submarine base on the Clyde in Scotland. “We are going to go ahead and come out of the EU on October 31.” When asked about his remark during the campaign for the party leadership that the odds on a no-deal Brexit were a million to one, he said: “Provided there is sufficient goodwill and common sense on the part of our partners, that is exactly where I would put the odds.”

Johnson also said that the Irish border backstop — designed to prevent the return of a hard border between Ireland and the UK’s province of Northern Ireland — was “no good, it’s dead, it’s got to go.”

Under the backstop, the United Kingdom would remain in a customs union with the EU “unless and until” alternative arrangements are found to avoid a hard border.

The 27 other EU members, though, say publicly and privately that the divorce settlement — including the backstop — is not up for barter. Many EU diplomats say they believe an election in Britain is highly likely.

If Johnson goes for a no-deal Brexit, some British lawmakers will attempt to stop him, possibly collapsing his government. If they try to thwart Brexit, an election becomes much more likely. — Reuters

Boris, girlfriend move into Downing Street 

  • Britain’s new Prime Minister Boris Johnson moved into Downing Street on Monday with his girlfriend Carrie Symonds, becoming the first unmarried couple to live in the world-famous address in London
  • “There won’t be any additional cost to the taxpayer,” the Downing Street spokesperson said, implying that Symonds would not be provided with any publicly-funded staff usually associated with a First Lady

Threat to unity

  • Differences over Brexit have strained the bonds that tie the UK. While the country voted 52-48 to leave in 2016, Scotland and Northern Ireland voted to stay in the EU while Wales and England vote to leave
  • The question of the unification of Ireland and British-ruled Northern Ireland will inevitably arise if Britain leaves the EU without a divorce deal, Irish PM Leo Varadkar said
  • He also suggested that a so-called hard Brexit could undermine Scotland’s place in the UK
  • Johnson made his first visit to Scotland as prime minister on Monday, visiting HMS Victorious, one of Britain’s four Vanguard- class nuclear submarines