A miracle did not happen: Brexit was again stuck in a swamp of counterproductive negotiations. Theresa May and the Labour Party representatives could not come to a common decision, and this fact became obvious. According to the British press, on Tuesday, the prime minister was supposed to submit her updated action plan, which would include the creation of a temporary customs union with the EU (which would be valid until the next general election in 2022), as well as the introduction of common market rules goods. In addition, the Cabinet was supposed to introduce (and support) to Parliament a law that guarantees the workers in Great Britain with the same rights as those in the European Union.
After a resonant publication, the market was inspiringly waiting for today, but traders were again disappointed: the May government failed to reach an agreement with the Labour Party. Moreover, the opposition accused the prime minister of violating the confidentiality of the negotiations. One of the most influential Laborites, John McDonnell, attacked the prime minister with criticism: in his opinion, May leads a "double game", disclosing details of the non-public dialogue. Judging by the reaction of the Labour Party, the situation could really move forward, however, internal party behind-the-scenes intrigues (both among Labor and conservatives) led to a leak of information and subsequent scandal. As a result, the parties were forced to back down, voicing the duty phrase about "continuing the negotiation process."
By and large, Labour and the Conservatives have lost their last chance to prevent Britain from participating in the European Parliament elections. Theresa May looked visibly disappointed today: she expressed regret that the British would have to go to the polls. Indeed, the election of British representatives to the European legislature looks ridiculous, since the country has "with one foot" already withdrawn from the EU. Nevertheless, London is forced to take this step, fulfilling the conditions of the "postponement" of Brexit.
After the events of Tuesday, the pound approached the bottom of the 30th figure against the dollar, since the future prospects of the negotiations look vague. The main problem is that there is no solidity among the members of the Conservative Party or among the representatives of the Labour Party. The "hawkish" wing of the Conservatives strongly opposes the customs union with the European Union and still demands the prime minister's resignation. Part of the Labour Party also does not support the idea of creating/maintaining a common customs space with the EU (even temporary), insisting on holding a repeat referendum. Moreover, in their opinion, the British should choose not only between the versions of Brexit, but also express their opinion on the expediency of the "divorce process" as a whole. Given the diversity of the political positions of the parties, it will not be easy for the prime minister to collect votes, even if there are certain concessions on her part.
And yet many experts do not lose hope that Labour and Conservatives will eventually come to a compromise, although this may take several more weeks (and maybe months) of negotiations. According to them, the failed results of the local elections (which were held last week in England and Northern Ireland) brought together the positions of the opposing political forces. Let me remind you that the Conservative Party of Great Britain lost more than 1.3 thousand seats out of 8.4 thousand, while losing control over 49 local councils from 248. The election results were also disappointing for the Labour Party: they lost 6 local councils and 86 deputies. Both parties associate such a negative result with Brexit, namely with a long-term period of uncertainty, therefore, after the announcement of the election results, the politicians started the negotiation process.
Furthermore, analysts are not excluding the option of a second referendum. Over the past year and a half, British politicians have treated this scenario differently - for example, at one time Laborites actively lobbied for this idea, but then abandoned it. Now, many oppositionists are again campaigning for a re-plebiscite, and is rumored to be very successful. So, according to the British press, Theresa May recently held a meeting with her assistants and the cabinet ministers where she tried to plan the script in case the government could not prevent a Parliamentary vote on the second referendum. This meeting was held on the eve of the next round of negotiations with the Labour Party, which will be held this week.
In other words, the option of a repeated referendum cannot be disregarded, although such a scenario implies a rather complicated legal procedure (many legislative acts must be amended). But if the parties finally reach an impasse, Parliamentarians can take this step, despite all its negatives and difficulties.
Thus, the British currency has no choice but to respond to the next rumors and comments on further negotiations between Labour and Theresa May's government. Given the fact that the British still have to participate in the elections to the European Parliament, the next dialogue between the parties may again be delayed for several weeks.
The material has been provided by InstaForex Company - www.instaforex.com