Earlier today, I had the opportunity to discuss the outlook for sterling and the US dollar on Bloomberg TV with Rishaad Salamat and Haidi Lun. It is a momentous day with Article 50 of the Lisbon Treaty being formally triggered by UK Prime Minister May, nine months after what was, at least initially, a non-binding referendum.
European Council President Tusk is expected formally to respond for the EU before the weekend. It is not immediately clear when the negotiations will start. However, it is clear that the formal triggering of Article 50 will transfer the initiative and balance of power toward the EU from the UK. Over the 24 months, there will be plenty of posturing, negotiations, brinkmanship tactics, and blinking.
Many investors may be best served by keeping the core issue in perspective. The UK government is willing to lose access the single market in order to get more control of its borders for immigration and trade. Europe, on the other hand, just celebrated the 60th anniversary of the Treaty of Rome which established the European Project. Losing a member, and an important, though not a founding member, is a significant blow to Europe, which is having its own identity crisis of sorts.
Some evolution that the UK blocked, such as European army, may go forward, but the UK's amputation will change the balance in Europe on a range of issues and alter Europe going forward. Non-EMU, EU members, have lost a voice, and these countries are mostly in eastern and central Europe and are presently strained relationships with the older Western part....MORE, including Bloomberg video.
Wednesday, March 29, 2017
Marc Chandler Talks "Brexit, Europe and EU Challenges"
From Marc to Market: