No Cinderella story for Brexit

Businesses across Europe are still waiting with bated breath over the results of the 11th hour negotiations to thrash out a Brexit trade deal.

In the three and a half years since the UK voted to leave the single market the two sides have been poles apart on a range of issues.

As the spectre of a no-deal withdrawal continued to rise, the robust talk about each side’s intransigence was softened behind the scenes by some efforts to compromise.

However, both sides seemingly have red lines and those lines look to have been painted on concrete rather than drawn in sand and therefore containing room for some manipulation.

UK Prime Minister Boris Johnson has been battered by the way in which COVID has hit the UK and the rising anger in many corners over the Government’s response.

That pressure could have two vastly different impacts.  In public he has made it clear that the UK will not bend on its determination to regain full control of its waters and with it the fish within them.

Mr Johnson may see a tough line and a tough deal as a way in which to placate the voters who have lost faith over the COVID crisis. However, there are some that say he is unpopularity has created pressure to deliver a deal and as such he will need to cave into EU demands to deliver a deal and claim victory however Pyrrhic.

Word from inside the talks is that fishing rights remain the major catch. The UK wants 80% of the current EU level to be handed back. The EU has offered 15%-18%. The UK it seems may have softened and reduced the demand to 60% but EU negotiators are being told by the EU coastal states not to budge.

Sadly, for the UK financial services sector there has been no indication that the UK team have put the restoration of the financial services passporting rights as a pre-condition for any movement on the fishing deadlock.

The London market have been making all the right noises around already being ready for Brexit, but a no deal will come with issues around claims payments and a number of technical complexities not to mention the debate which is yet to be had on regulatory equivalence.

Monday is viewed as the final deadline for any deal.

The EU is renowned for taking negotiations into the eleventh hour. It is now 11.59 and barring a miracle which sees a deal be cobbled together before midnight, the UK’s priority to restore parity for financial services looks set to turn into a pumpkin rather than any magical carriage.