Sterling climbed 0.89 per cent against the euro today after the EU’s chief negotiator sounded positive notes about the likelihood of the UK securing a Brexit deal.
Michel Barnier said there were positive elements of Prime Minister Theresa May’s Chequers plan, which Brexiteers had previously dismissed as “dead in the water”, as a transcript of his conversation with the UK’s Brexit committee was released today.
The pound leapt from 1.11 to the euro to 1.12 and from 1.29 to 1.30 against the dollar.
Barnier criticised the Chequers plan’s proposal for a single rulebook for trade in goods, and a facilitated customs arrangement that would see imports charged UK tariffs, then the EU tax if they went onto the continent.
“When it comes to those two proposals, there is a real problem of substance for us, because they would weaken and would lead to the unravelling of the single market,” he said.
But other elements Barnier said could serve as the foundations of a new relationship between the UK and EU.
“There in the white paper, you seem to be suggesting a kind of à la carte single market, a kind of cherry-picking approach, and we do not agree,” he said.
“But other than that, the other elements are something that we can work on. We could work on those to work towards an unprecedented partnership.”
The negotiator said it was too early to discuss terms of a future relationship between the two countries, but said “we are almost in a position to be able to start drafting the political declaration” that would inform those discussions.
He also suggested there could be some flexibility around the Irish border – something exclusively revealed by City A.M. last week.
He said the UK and EU can “de-dramatise this backstop by describing what it will mean on the ground, having a kind of set of checks that are technical and operational and that would be applied unless and until there is an agreement on the future relationship that would finally settle all these issues”.
“We are ready to simplify these checks, to have them carried out at a number of different places and have checks, thanks to technical means, which could take different forms,” he said.
“But that effort to de-dramatise the situation should be made by both sides, which is why I say Ireland remains the crucial issue if we are to get an agreement, but if there is no operational backstop on Ireland, there will not be an agreement.”