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PIG TODAY-Angela Merkel rejects one of Theresa May's key Brexit demands

Divorce settlement must come before talks about future relationship, says chancellor, as EU leaders respond to article 50 letter. Angela Merkel has rejected one of Theresa May’s key Brexit demands, insisting negotiations on Britain’s exit from the European Union cannot run in parallel with talks on the future UK-EU relationship.

“The negotiations must first clarify how we will disentangle our interlinked relationship,” the German chancellor said in Berlin. “Only when this question is dealt with can we – hopefully soon after – begin talking about our future relationship.”

In her six-page letter triggering article 50 and formally launching the process of leaving the EU, the prime minister said she believed it was “necessary to agree the terms of our future partnership alongside those of our withdrawal from the European Union”.

The EU institutions and 27 remaining member states, however, have long said they were determined the divorce settlement, such as the rights of EU citizens in the UK and Britons on the continent and the size of Britain’s exit bill, must first be agreed before substantive talks on a future relationship could begin.

On a day of some drama in Brussels, Donald Tusk, the president of the European council, warned after receiving May’s letter that there would be “no winners” from Brexit, and the next two years would be a matter of “damage control”.

Wearing a black tie and appearing at times visibly moved, the former Polish prime minister spoke to reporters just half an hour after receiving the prime minister’s letter from the UK’s ambassador to the EU, Sir Tim Barrow.

Holding the letter up for the benefit of the cameras, Tusk said: “So here it is, six pages. The notification from prime minister Theresa May triggering article 50 and formally starting the negotiations of the United Kingdom’s withdrawal from the European Union.

“There is no need to pretend that this is a happy day, neither in Brussels nor in London. After all most Europeans, including almost half the British voters, wish that we would stay together, not drift apart.”

Tusk said the EU27 were “united and determined” and that the council and the European commission had a strong mandate to protect the EU’s interests. But he added: “As for me, I will not pretend I am happy.”

The EU’s goal, he said, was to minimise the costs of Brexit for the EU’s citizens, businesses and member states. “We will do everything in our power and we have all the tools to achieve this. As for now, nothing has changed. Until the UK leaves the European Union, EU law will continue to apply to and within the UK.”

Tusk said he would share a proposed formal response from the council to the UK with the other member states on Friday and that agreement on so-called “guidelines” would be reached at a special summit in a month’s time. “What can I add to this?” Tusk said. “We already miss you. Thank you and goodbye.”

Elsewhere, however, sadness gave way to a determination to protect the EU’s interests in the coming talks. The French president, François Hollande, said on a visit to Indonesia that Brexit “will be painful for the British”.

The frontrunner in the race to succeed him, the centrist Emmanuel Macron, said the overriding priority must be to defend the EU. “The question is not to punish the UK for a vote made by British people,” Macron said.

“My deep wish is to have Britain with the EU in another relationship … [But] my priority will be to protect the European Union, the interests of the European Union, and the interests of European citizens.”

Italy’s prime minister, Paolo Gentiloni, said his country’s priorities would be “confidence in the future of the EU and its unity, and the defence of our national interests, both at an economic level and in regards to the rights of our citizens in Britain”.

Belgium’s prime minister, Charles Michel, said his country shared some of the closest economic ties with the UK, but a trade agreement had to find the right balance between rights and obligations. “Commitments from the past must be honoured.”

Joseph Muscat, the prime minister of Malta, which holds the rotating six-month EU presidency, said negotiations must be fair, transparent and honest, but added: “It is imperative that EU membership emerges as the superior option. The EU will not be 27 different opinions on Brexit but one common vision.”

Jean-Claude Juncker, president of the European commission, said the UK’s decision to quit the bloc was a “choice they will regret one day”. He also left the door open for an “associative” citizenship of the EU for Britons, an idea proposed by the European parliament’s Brexit coordinator, Guy Verhofstadt. Juncker said: “It’s not my working assumption that this will happen, but I know mainly the chief negotiator of the European parliament is asking for this. It would not disturb me if this happened. But this cannot be the answer. It doesn’t take away from Brexit all the dangers and problems. It would be an answer for citizens.”

A European parliament resolution scoping out what will be acceptable to MEPs, who will have the right to veto any future deal, contains a series of demands that appear to scupper the British government’s hopes for the coming talks.

The document, leaked to the Guardian, vowed that Britain would not be given a free trade deal by the EU in the next two years and said a transition arrangement to cushion the UK’s exit after 2019 could last no longer than three years.

British cabinet ministers have repeatedly insisted that a comprehensive free trade deal could be struck within the two years of talks allowed under the Treaty of Rome.

The document further suggested the UK would not only be under the jurisdiction of the European court of justice during any transition period but that its treatment of EU citizens forever into the future would be a matter for its judges.

In her letter, May had insisted that leaving the EU would mean leaving the jurisdiction of the court in Luxembourg. However, Verhofstadt denied that this would be possible.

“The withdrawal agreement will be an act of union law,” Verhofstadt told a press conference in Brussels. “An act of union law is naturally controlled by the European court of justice. It is as simple as that. The withdrawal agreement will be nothing outside the treaties. So automatically the court of justice is competent.”

Manfred Weber, the chair of the largest party grouping in the European parliament, warned Britain that the consequences of Brexit would impact on its citizens daily lives, and that the EU would be “tough” on the UK.

“We have developed in the last decades thousands of detailed regulations which had the idea of limiting the impact of borders in our daily lives, in the daily life of citizens, to make our life more comfortable, easier, more safe,” Weber said.

“That was the idea of all these regulations, and the British people decided to leave this union, so they will not be so comfortable, so safe, not so economically strong. That’s why we will say that it really is a very negative day.”

Denmark’s prime minister, Lars Løkke Rasmussen, said Britain’s farewell to the EU was “incredibly sad”, but added he expected “many bumps on the road” following a decision that “will have consequences … Rights and responsibilities go hand in hand in the EU. You cannot have one without the other.”

The Spanish prime minister, Mariano Rajoy, said Spain’s priority was to “minimise uncertainty in relation to investment in place between Spain and the UK”, while Sweden’s Stefan Löfven said he wanted “organised, results-oriented negotiations” because good relations with London “are important for Britain, Europe and Sweden”.

Source: theguardian.com

Divorce settlement must come before talks about future relationship, says chancellor, as EU leaders respond to article 50 letter. Angela Merkel has rejected one of Theresa May’s key Brexit demands, insisting negotiations on Britain’s exit from the European Union cannot run in parallel with talks on the future UK-EU relationship.

“The negotiations must first clarify how we will disentangle our interlinked relationship,” the German chancellor said in Berlin. “Only when this question is dealt with can we – hopefully soon after – begin talking about our future relationship.”

In her six-page letter triggering article 50 and formally launching the process of leaving the EU, the prime minister said she believed it was “necessary to agree the terms of our future partnership alongside those of our withdrawal from the European Union”.

The EU institutions and 27 remaining member states, however, have long said they were determined the divorce settlement, such as the rights of EU citizens in the UK and Britons on the continent and the size of Britain’s exit bill, must first be agreed before substantive talks on a future relationship could begin.

On a day of some drama in Brussels, Donald Tusk, the president of the European council, warned after receiving May’s letter that there would be “no winners” from Brexit, and the next two years would be a matter of “damage control”.

Wearing a black tie and appearing at times visibly moved, the former Polish prime minister spoke to reporters just half an hour after receiving the prime minister’s letter from the UK’s ambassador to the EU, Sir Tim Barrow.

Holding the letter up for the benefit of the cameras, Tusk said: “So here it is, six pages. The notification from prime minister Theresa May triggering article 50 and formally starting the negotiations of the United Kingdom’s withdrawal from the European Union.

“There is no need to pretend that this is a happy day, neither in Brussels nor in London. After all most Europeans, including almost half the British voters, wish that we would stay together, not drift apart.”

Tusk said the EU27 were “united and determined” and that the council and the European commission had a strong mandate to protect the EU’s interests. But he added: “As for me, I will not pretend I am happy.”

The EU’s goal, he said, was to minimise the costs of Brexit for the EU’s citizens, businesses and member states. “We will do everything in our power and we have all the tools to achieve this. As for now, nothing has changed. Until the UK leaves the European Union, EU law will continue to apply to and within the UK.”

Tusk said he would share a proposed formal response from the council to the UK with the other member states on Friday and that agreement on so-called “guidelines” would be reached at a special summit in a month’s time. “What can I add to this?” Tusk said. “We already miss you. Thank you and goodbye.”

Elsewhere, however, sadness gave way to a determination to protect the EU’s interests in the coming talks. The French president, François Hollande, said on a visit to Indonesia that Brexit “will be painful for the British”.

The frontrunner in the race to succeed him, the centrist Emmanuel Macron, said the overriding priority must be to defend the EU. “The question is not to punish the UK for a vote made by British people,” Macron said.

“My deep wish is to have Britain with the EU in another relationship … [But] my priority will be to protect the European Union, the interests of the European Union, and the interests of European citizens.”

Italy’s prime minister, Paolo Gentiloni, said his country’s priorities would be “confidence in the future of the EU and its unity, and the defence of our national interests, both at an economic level and in regards to the rights of our citizens in Britain”.

Belgium’s prime minister, Charles Michel, said his country shared some of the closest economic ties with the UK, but a trade agreement had to find the right balance between rights and obligations. “Commitments from the past must be honoured.”

Joseph Muscat, the prime minister of Malta, which holds the rotating six-month EU presidency, said negotiations must be fair, transparent and honest, but added: “It is imperative that EU membership emerges as the superior option. The EU will not be 27 different opinions on Brexit but one common vision.”

Jean-Claude Juncker, president of the European commission, said the UK’s decision to quit the bloc was a “choice they will regret one day”. He also left the door open for an “associative” citizenship of the EU for Britons, an idea proposed by the European parliament’s Brexit coordinator, Guy Verhofstadt. Juncker said: “It’s not my working assumption that this will happen, but I know mainly the chief negotiator of the European parliament is asking for this. It would not disturb me if this happened. But this cannot be the answer. It doesn’t take away from Brexit all the dangers and problems. It would be an answer for citizens.”

A European parliament resolution scoping out what will be acceptable to MEPs, who will have the right to veto any future deal, contains a series of demands that appear to scupper the British government’s hopes for the coming talks.

The document, leaked to the Guardian, vowed that Britain would not be given a free trade deal by the EU in the next two years and said a transition arrangement to cushion the UK’s exit after 2019 could last no longer than three years.

British cabinet ministers have repeatedly insisted that a comprehensive free trade deal could be struck within the two years of talks allowed under the Treaty of Rome.

The document further suggested the UK would not only be under the jurisdiction of the European court of justice during any transition period but that its treatment of EU citizens forever into the future would be a matter for its judges.

In her letter, May had insisted that leaving the EU would mean leaving the jurisdiction of the court in Luxembourg. However, Verhofstadt denied that this would be possible.

“The withdrawal agreement will be an act of union law,” Verhofstadt told a press conference in Brussels. “An act of union law is naturally controlled by the European court of justice. It is as simple as that. The withdrawal agreement will be nothing outside the treaties. So automatically the court of justice is competent.”

Manfred Weber, the chair of the largest party grouping in the European parliament, warned Britain that the consequences of Brexit would impact on its citizens daily lives, and that the EU would be “tough” on the UK.

“We have developed in the last decades thousands of detailed regulations which had the idea of limiting the impact of borders in our daily lives, in the daily life of citizens, to make our life more comfortable, easier, more safe,” Weber said.

“That was the idea of all these regulations, and the British people decided to leave this union, so they will not be so comfortable, so safe, not so economically strong. That’s why we will say that it really is a very negative day.”

Denmark’s prime minister, Lars Løkke Rasmussen, said Britain’s farewell to the EU was “incredibly sad”, but added he expected “many bumps on the road” following a decision that “will have consequences … Rights and responsibilities go hand in hand in the EU. You cannot have one without the other.”

The Spanish prime minister, Mariano Rajoy, said Spain’s priority was to “minimise uncertainty in relation to investment in place between Spain and the UK”, while Sweden’s Stefan Löfven said he wanted “organised, results-oriented negotiations” because good relations with London “are important for Britain, Europe and Sweden”.

Source: theguardian.com

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Market Analysis
AUD/USD struggles near multi-week lows, just above mid-0.6700s
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Market Analysis
ECB’s Villeroy: Brexit uncertainty likely to last for at least some quarters in the future
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Market Analysis
Forex Today: Sterling surges as poll backs Boris, dollar bulls thankful, Trump angers China
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Market Analysis
If Trump refuses to roll back tariffs, loss to American farmers could be permanent – Global Times
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Market Analysis
EUR/USD is offered near term – Commerzbank
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Market Analysis
Forex Today: Massive pre-holiday US data dump, Trump holding back deal, critical UK poll eyed
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Market Analysis
UK: Disorderly Brexit comes off the table – ABN AMRO
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Market Analysis
EUR/USD faces dual resistance lines, downside is easier – Confluence Detector
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Market Analysis
Forex Today: Markets doubt US-Sino progress, Powell sees glass filling, GBP/USD spooked by poll
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Market Analysis
EUR/USD could still re-test the vicinity of 1.1100 – Commerzbank
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Market Analysis
Forex Today: Cheering China's olive branch to Trump, Boris extends lead, EUR/USD faces test
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Market Analysis
Risk sentiment buoyed by trade optimism, focus on German IFO
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Market Analysis
Markets remain fixated with the US-China Trade War and Brexit
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Market Analysis
JPY Futures: looks neutral/bullish near-term
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Market Analysis
ECB’s Lagarde: We face a global environment that is marked by uncertainty
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Market Analysis
Breaking: EUR/USD jumps to 1.1085 as German Preliminary Manufacturing PMI surprises positively with 43.8
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Market Analysis
EUR/USD clings to gains near 1.1080 ahead of ECB
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