Hooray, a new season of the Brexit soap

A lot of people are eagerly looking forward to the final season of Game of Thrones, the first episode of which can be seen this weekend. However, the plot twists in the 'Brexit game' are just as surprising. Moreover, much more is at stake.

Brexit is causing enormous division; not only in the House of Commons, but also with the heads of government in the European Union on Wednesday evening 10 April. France, Spain, Belgium and several other countries have argued for a short delay, because then Britain will not have to participate in European elections and the House of Commons will continue to be under great pressure to find an agreement.

However, on the other hand, Germany and the Netherlands, among others, argued for a much longer delay. There is then no danger that British Prime Minister Theresa May will soon have to come back to beg for another postponement.

golden middle way
European heads of government have already found the golden mean that the British House of Commons has been looking for for months after a few hours of negotiations. May gets a postponement until October 31† If May gets the green light in parliament about the agreement with the European Union, then the country can turn its back on Europe sooner. In any case, the good news is that a hard Brexit can be prevented this way.

The bad news, on the other hand, is that there is still no prospect of a definitive solution. The pound hardly moved, although the events of the past few days offer all kinds of new insights.

This week's lesson
The most important lesson is that the chances of a hard Brexit are negligible. British politicians are prepared to go far to prevent a chaotic exit from the European Union. Last week the House of Commons took a law forcing the British government to request a delay from European leaders to avoid a hard Brexit. That law was subsequently ratified by the House of Lords at lightning speed.

In the meantime, Europe does not want to run the risk of being blamed for economic damage caused by a British departure without proper agreements. In addition, the entire Brexit soap opera is a good warning for countries that are considering leaving the European Union.

What now?
The coming weeks will therefore be dominated by the talks that Prime Minister May has with opposition leader Jeremy Corbyn. If those talks fail, there is a good chance that she will try for the fourth time to get her agreement through the House of Commons. And if that fails, parliamentarians can get ready for another indicative round of voting on alternative proposals.

As long as May is at the helm, however, there is (very) little prospect of a breakthrough. Only in December will the Conservative Party have the first chance to sideline her. So we can get ready for another season of the Brexit soap.

Joost Derks

Joost Derks is a currency specialist at iBanFirst. He has over twenty years of experience in the currency world. This column reflects his personal opinion and is not intended as professional (investment) advice.

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