Fundamental Analysis Squaring Circles Squaring Circles Tuesday, 19 December 2017 11:53 Share 0 Tweet 0 Pin it 0 +1 By: DailyForex.com It is probably correct to say that a Tory truce has been declared over Brexit until the New Year. The PM was defeated in the Commons over an amendment to the EU Withdrawal Bill last week which will require the government to gain parliamentary approval for a separate Bill which will enact the UK’s withdrawal from the EU (or, by implication, not). However, at the end of last week, Mrs May secured the agreement of the Council of Europe that discussions can move on to the second phase which will include the future trade relationship; a success. However, no sooner was the mutual congratulations over than the cracks started to emerge between what the EU will offer, what Mrs May hopes for and what hard Brexit politicians are demanding. Shockingly, the cabinet has never discussed its wishes for what a post-Brexit UK-EU trade deal will look like. It has been suggested that this was for the very good reason that any discussion would put Brexit Hawks and Doves in government at each other’s throats. It means that irreconcilable positions will now be exposed. For its part, the EU has made it clear that the transitional period (of 2 years) that the UK wants after it formally leave the bloc is not a foregone conclusion and it may take until the separation deal concludes (perhaps in October) before it will be clear if it can be agreed to. Equally, in a huge blow to May and the Bullish faction, the EU has specified that during such a period, the UK will be expected to follow all EU rules and continue to accept freedom of movement. The Bulls want the freedom to forge free trade agreements during this period and it is clear that any formal agreements cannot be signed in this transition. Luminaries such as Boris Johnson, the foreign secretary, and a leading back-bencher, Jacob Rees-Mogg have been quick to point out that the UK will be reduced to a “vassal state” of the EU during this period. It will be bound by existing and new EU law, but not have a say in framing such legislation (and no veto, of course) and would be excluded from EU institutions and the Council of Europe. They suggest that Mrs May must refuse this situation – Mrs May will be given a choice by the EU: take it or leave it. The coming months will tell if any government compromise can be found which will resolve the differences of the Hawks and the Doves. Even if this can be achieved, such a consensus is likely to be confronted by the immovable object of a unified EU27 stance. Dr. Mike Campbell Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.