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PM Johnson tells parliament - You can tie my hands, but I will not delay #Brexit

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Prime Minister Boris Johnson said on Tuesday (10 September) he would not request an extension to Brexit, hours after a law came into force demanding that he delay Britain’s departure from the European Union until 2020 unless he can strike a divorce deal, write William James and Kylie MacLellan of Reuters.

For the second time in a week, lawmakers then rejected Johnson’s request to try to break the deadlock through an early national election.

With the future of Brexit mired in uncertainty, parliament was suspended until Oct. 14, sparking tense scenes in the House of Commons where opposition lawmakers held signs reading “silenced” and yelled “shame on you” at Johnson’s ruling Conservatives.

Johnson appeared to have lost control of Britain’s withdrawal from the European Union with the approval of the law, which obliges him to seek a delay unless he can strike a new deal at an EU summit next month.

EU leaders have repeatedly said they have not received specific proposals ahead of an EU summit on 17 and 18 October, at which Johnson says he hopes he can secure a deal.

“This government will press on with negotiating a deal, while preparing to leave without one,” Johnson told parliament after the result of the vote on an early election.

“I will go to that crucial summit on October the 17th and no matter how many devices this parliament invents to tie my hands, I will strive to get an agreement in the national interest ... This government will not delay Brexit any further.”

Opposition Labour Party leader Jeremy Corbyn said the party was eager for an election, but would not support Johnson’s move to hold one until it was certain a delay to Brexit had been secured.

“As keen as we are, we are not prepared to risk inflicting the disaster of no-deal on our communities,” Corbyn said.

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 an exit on 31 October without a withdrawal agreement to smooth the transition, to abandoning the whole endeavour.

The bill seeking to block a no-deal exit, passed into law on Monday when it received assent from Queen Elizabeth, 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.

Responding to concerns the government could ignore the legislation, Foreign Minister Dominic Raab earlier told parliament that the government would respect the rule of law but added, “Sometimes it can be more complex because there are conflicting laws or competing legal advice.”

Johnson took over as prime minister in July after his predecessor, Theresa May, failed to push the Withdrawal Agreement through parliament.

Parliament returned from its summer break last week, and Johnson has lost all six votes held in the House of Commons since. The suspension of parliament, or prorogation, will last for five weeks.

Under Johnson’s premiership, Britain’s three-year Brexit crisis has stepped up a gear, leaving financial markets and businesses bewildered by an array of political decisions that diplomats compare to the style of U.S. President Donald Trump.

BlackRock, a U.S. investment firm that manages $6.8 trillion of assets, said a no-deal Brexit or a referendum had become more plausible.

The pound trimmed gains against the dollar, to stand slightly higher on Monday at $1.234. It jumped to a six-week high of $1.2385 in London trading after economic data beat forecasts.

House of Commons Speaker John Bercow, champion of parliament in its move to rein in the prime minister over Brexit, took a veiled swipe at Johnson as he announced on Monday he would stand down from the role, issuing a warning to the government not to “degrade” parliament.

As Bercow tried to suspend parliament on Monday night, well after midnight, a brief scuffle broke out near his chair as opposition lawmakers held up signs and booed.

“This is not a normal prorogation,” Bercow said. “It is not typical, it is not standard. It is one of the longest for decades and it represents not just in the minds of some colleagues but huge numbers of people outside, an act of executive fiat,” he told a raucous chamber.

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.

Ireland told Johnson on Monday (9 September) that he must make specific proposals on the future of the Irish border if there was to be any hope of averting a no-deal departure, saying Dublin could not rely on simple promises.

“In the absence of agreed alternative arrangements, no backstop is no deal for us,” Irish Prime Minister Leo Varadkar, standing beside Johnson, told reporters.

“We are open to alternatives, but they must be realistic ones, legally binding and workable, and we haven’t received such proposals to date.”

Varadkar’s blunt remarks 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 pact struck last November.

“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 October EU summit.

The law that took effect on Monday does allow for one scenario in which a no-deal Brexit could take place on 31 October - if parliament approved a no-deal exit by 19 October.

However the current parliament would be unlikely to switch stance and approve a no-deal exit by then.

Lawmakers voted 311 to 302 on Monday to demand the government publish documents over its planning for a no-deal Brexit and private communications from government officials involved in a decision to suspend parliament.

Those calling for the documents to be published say they will show the decision to suspend parliament was politically motivated, as a way to limit discussion on Brexit. The government said the suspension was to give Johnson the chance to set out a new legislative agenda.

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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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