Brexit alert: Will Brexit negotiations accelerate or remain stagnated?

Following the “stalemate” situation described by Michel Barnier last week, Theresa May met with EU officials yesterday evening in an attempt to bring…

Following the “stalemate” situation described by Michel Barnier last week, Theresa May met with EU officials yesterday evening in an attempt to bring some resolution to the issues, ahead of the EU summit beginning later this week.

The Brexit Secretary, David Davis has today, in a speech to the Commons, confirmed that progress was made during Theresa May’s working dinner but there is still some way to go. The UK’s position is that the negotiations should now progress to include trade talks; whereas the EU maintains that the issues must be tackled in the correct order, namely, agreeing on the UK’s divorce bill, citizens’ rights and the longevity of the Good Friday Agreement. David Davis disagrees and believes that the UK is "reaching the limits of what we can achieve without consideration of the future relationship".

Whilst the Brexit Secretary updated the Commons, the Organisation for Economic Cooperation and Development (“OECD”), an economic think-tank, released a report stating that it would revise the gloomy forecasts it had previously made if the UK were to stay in the EU. The report specifically states “In case Brexit gets reversed by political decision (change of majority, new referendum, Etc.), the positive impact on growth would be significant”.

The Treasury quickly responded by rejecting any call for a second referendum and reinforcing the fact that the UK will leave the EU, irrespective of the OECD’s conclusions. The report’s release may be regarded as quite untimely given the current negotiation impasse. It did however comment that the UK must secure “the closest possible economic relationship” with the EU after Brexit, to prevent the economy suffering a long-term decline.

Whilst the negotiations and political activity remain buoyant, the insurance industry’s post-Brexit future remains firmly in the shadows. Despite repeated calls from the industry for the Government to address the uncertainty and the potential end result which may evolve, the position remains somewhat stagnant. It is inevitable that the industry must now await the next imminent development; whether the EU Summit will provide Michel Barnier with the required mandate to continue the negotiations with the UK to include trade agreements.

Contact us at brexit.group@weightmans.com with any queries.

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