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PM Johnson: 'Undaunted' by parliament's bid to block no-deal Brexit

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Prime Minister Boris Johnson said on Monday (9 September) that he was undaunted by an attempt by lawmakers to block a no-deal Brexit, setting up a showdown with parliament after it passed legislation demanding that he delay Brexit unless he strikes a new agreement, write Guy Faulconbridge and Elizabeth Piper of Reuters.

As he navigates the Brexit storm, Johnson was due to suspend parliament for over a month from Monday after it votes on his latest demand for a snap election, a vote that is likely to go against him.

Johnson had set up the suspension - called a prorogation - last month in what opponents cast as an attempt to sideline lawmakers as he attempts to pull the country out of the European Union by 31 October, with or without a withdrawal deal.

Brexit, the United Kingdom’s most significant geopolitical move in decades, remains in question more than three years since the 2016 referendum, with possible outcomes ranging from a no-deal exit to abandoning the whole endeavour.

Johnson, a former journalist who derided the EU and later became the face of the 2016 Vote Leave campaign, has repeatedly promised to deliver Brexit on 31 October and has said he will not countenance any delay.

He wants an election to break the deadlock.

An alliance of opposition lawmakers and rebels from Johnson’s own Conservative Party have passed a bill, which is due to become law on Monday once Queen Elizabeth gives her assent, ordering the prime minister to delay Brexit to 2020 unless he gets a deal.

“I’m absolutely undaunted by whatever may take place in parliament,” Johnson said in Dublin ahead of talks with Irish Prime Minister Leo Varadkar.

“We must get Brexit done because the UK must come out on 31 October, or else I fear that permanent damage will be done to confidence in our democracy in the UK,” Johnson said.

It was unclear what Johnson’s next move would be: the law will oblige him to seek a delay unless he can strike a new deal, but EU leaders have repeatedly said they have received no specific proposals.

Ireland told Johnson on Monday that he must make specific proposals on the future of the Irish border if there is to be any hope of averting a no-deal Brexit, saying Dublin cannot rely on simple promises.

“In the absence of agreed alternative arrangements, no backstop is no deal for us,” Varadkar, standing beside Johnson outside the Irish government, told reporters. “We are open to alternatives, but they must realistic ones, legally binding and workable and we haven’t received such proposals to date.”

The blunt remarks by Varadkar indicate the difficulty of Johnson’s gamble of using the threat of a no-deal exit to convince Germany and France that they must rewrite an exit agreement struck last November.

Johnson, who has no majority in parliament, is seeking an election just a few weeks ahead of the Oct. 31 deadline, though lawmakers have already refused that request once.

He put forward another motion in parliament on Monday to propose a poll, but it would require the support of two-thirds of lawmakers - and opposition parties have said they will not agree to an election until a no-deal exit is ruled out.

Labour Party leader Jeremy Corbyn met other opposition party leaders on Monday and they agreed they would vote against his election bid.

“All leaders agreed that they would not support Boris Johnson’s ploy to deny the people their decision by crashing us out of the EU with No Deal during a general election campaign,” Labour said.

The no-deal blocking bill will force Johnson to seek a three-month extension to the 31 October deadline unless parliament has either approved a deal or consented by 19 October to leave without one.

“I want to find a deal, I want to get a deal,” Johnson said in Dublin, adding that there was plenty of time to find one before the 17-18 October EU summit.

A spokesman for Johnson said that parliament would be suspended from Monday evening, meaning that an election is very unlikely before Oct. 31 unless parliament is recalled early.

Johnson took over as prime minister in July after his predecessor Theresa May failed to push the withdrawal agreement she had negotiated with the EU through parliament.

Since then, Britain’s three-year Brexit crisis has stepped up a gear, leaving financial markets and businesses bewildered by a array of striking political decisions that diplomats compare to the style of US President Donald Trump.

Trump has praised Johnson as “Britain’s Trump” and the two leaders say they have close ties. Trump has said the EU is being very tough on the United Kingdom.

In the past week alone, Johnson lost his majority in parliament, expelled 21 rebels from the Conservative Party and saw his own brother quit the government, torn between family loyalty and “the national interest”.

On Saturday, his work and pensions minister suddenly resigned, saying the government was focusing 80-90% of its work on no-deal preparations rather than seeking a withdrawal agreement.

Meanwhile two ministers said on Sunday that Johnson would not seek a delay at the EU summit next month - but notably declined to spell out how he would nevertheless obey the new law if no deal is agreed with the EU.

Foreign minister Dominic Raab said the government would “test to the limit” what the law would require ministers to do. The Daily Telegraph reported that Johnson’s office was exploring how it could sabotage any extension request by making it clear to the EU that it did not want a delay.

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Irish foreign minster says EU-UK trade deal breakthrough possible

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There is a window of several weeks for Britain and the European Union to reach a breakthrough in trade talks before Britain’s upper house of parliament considers the contentious Internal Market Bill, Ireland’s foreign minister said, writes Conor Humphries.

“I believe there is a window for negotiations that I hope the two negotiating teams, in particular the UK, will take in terms of giving the signals that are necessary to move this process into a more intensive phase,” Simon Coveney (pictured) told parliament. “It is possible to get a deal here.”

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As Brexit talks intensify, banks see sharply higher risk of no-deal exit

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The chances of Britain leaving the European Union without a trade deal have risen dramatically in the last three months, according to major investment banks, most of which now see the probability of such an outcome at 50% or higher, writes Elizabeth Howcroft.

Britain left the EU in January but is currently in a status-quo transition period, which ends on 31 December irrespective of whether or not a deal is agreed. On Monday (28 September), the two sides started a decisive week of talks, with one diplomat noting an improvement in “mood music”. But all six banks which participated in a Reuters poll in June are more pessimistic, with most citing UK legislation that would breach parts of the withdrawal agreement signed with the EU in January. The move has drawn threats of legal action from the EU.

The most dramatic re-assessment was by Societe Generale, which said the bill “gravely damaged” trust. The probability of no-deal now stands at 80%, according to the bank, which had assigned a 17% chance in June.

Germany’s Commerzbank, meanwhile, puts the probability of no-deal at slightly below 50%, versus 10% in June, a scenario which strategist Thu Lan Nguyen warns could hit the pound hard, possibly resulting in depreciation of “something around 10%”. The currency has fallen around 5% this month but with three months still to go before the transition period expires, options markets are pricing in more volatility ahead.

ING now believes the risk of no deal is 50%, up from 40% three months ago. Only a small proportion of this risk premium is priced by sterling, according to economist James Smith, who sees the currency possibly heading towards parity versus the euro.

In a more detailed forecast, Standard Chartered stuck with a one-in-two chance of an agreement by the end of the year but also saw a 20% chance of the transition period being extended and a 30% chance of exiting without a deal. JPMorgan, not included in the Reuters poll, expects the worst-case outcome to wipe at least three percentage points off UK gross domestic product in 2021. It puts the risk of no-deal at one-in-three but told clients that “with brinkmanship part of the process it may appear higher than that before agreement is reached”.

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EU negotiators willing to work on legal agreement with UK - The Times

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European Union negotiators have signalled that they are willing to begin work on a joint legal text of a trade agreement with the UK, ahead of trade talks that resume on Tuesday, The Times reported on Tuesday (29 September), writes Rebekah Mathew in Bengaluru.

EU chief negotiator Michel Barnier is ready to begin work on a joint draft version of a free trade agreement, known as a "consolidated legal text", this week, the newspaper reported.

Barnier expects Britain’s chief negotiator David Frost to provide more details of fishing quotas and the government’s future subsidy policy, the Times report said, adding that EU has also backed away from a threat to suspend trade and security talks.

Britain left the EU last January and is locked in negotiations on a new trade deal from 2021, as well as on implementing the divorce, as set out in the Withdrawal Agreement, especially on the sensitive Irish border.

Trade talks resumed in Brussels on Tuesday. Lasting until Friday (2 October) morning and also due to cover energy links and transport, they are the final round of negotiations scheduled so far.

Brussels have dropped its demands for the two sides to reach a broad agreement on all the outstanding areas of dispute before drafting a final agreement and expects UK to engage in detailed discussions on post-Brexit fishing quotas and the government’s future subsidy policy, the newspaper said.

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