Fears of one-year delay in start of Brexit negotiations

Fears are being expressed in London and Brussels that talks on  Brexit could be delayed by as much as a year in the wake of the British general election, according to media reports.

Talks are scheduled to begin on 19th June. The EU position is that the two sides must resolve the divorce bill, citizens’ rights and issues relating to the border in Ireland before discussing a future trading relationship. Brexit minister David Davis seemed to indicate on election day that he accepted the EU’s staging requirements.

Now, however, senior European diplomats are being quoted as saying that if the British insist on raising a trade agreement right away, their chief negotiator Michel Barnier will need a new negotiating mandate. “If they don’t accept the phased negotiations then we will take a year to draw up a new set of negotiating guidelines for Barnier,” they told the Guardian.

Credit ratings agencies Moody’s and S&P also reckon the uncertain election outcome will lead to delayed talks.  The loss of a Conservative majority will “complicate and probably delay Brexit negotiations” and could also further pressure the UK’s public finances, Moody’s warned.

“The public debt ratio will rise further and for longer than we had expected, placing the UK among the few highly rated European sovereigns whose public debt is still rising.”

 

S&P Global Ratings also said it believed the lack of an overall majority for any one party was likely to delay Brexit negotiations. S&P economist Jean-Michel Six said: “In terms of the [UK’s} outlook for growth, it’s clear that things are not going in the right direction.This latest bit of instability can only weaken the business environment and consumer confidence.”