UK: Politics at the centre stage – Danske Bank

In the UK, PM Theresa May has decided to postpone the release of the government's white paper on the future relationship with the EU until after the EU summit on 28-29 June, points out the research team at Danske Bank.

Key Quotes

“While this is not positive for the negotiations, it is not a big surprise either, as the UK and not least the Cabinet are still much divided on what the future relationship (especially with respect to customs) should look like. The problem is that the next summit is in October, where the risk is that the UK and EU27 will need to agree on everything. UK companies expressed their concerns in a meeting held with Theresa May yesterday.”

“The EU's chief negotiator, Michel Barnier, still warns that much is at stake if the two sides cannot reach an agreement on how to resolve the Irish border issue by the end of the month. It remains our base case that the two sides will reach an agreement eventually but it may be much closer to the deadline before it happens and risks are increasing as time goes by.”