Odds Of Withdrawal Agreement
Betting rates have put a Brexit trade deal between Britain and the European Union at 85% by the end of the year. Is it therefore time to reassess the chances of an agreement before the end of the year? We still believe that the chances are strong enough for a free trade agreement to be concluded, but there are still many ways to derail things. Here are some of the reasons for optimism and pessimism. On Thursday night, a senior Downing Street source told the media that the chance to reach an agreement was “going backwards.” The general consensus is that if there is an agreement, the government will go back to those steps and perhaps argue that the agreement means that the “safety net” of the law is no longer necessary. But there is no guarantee that this will happen and it is quite clear that the EU will not be inclined to sign an agreement if the bill is not diluted. The odds of no-deal also increased to 58% on the Smarkets betting exchanges, sharply from last week`s 19% price. Paddy Power and Betfair are offering odds with a 50% probability for a no-deal, a jump of 33% on Wednesday. A third area of disagreement is the so-called governance of any future agreement. This is partly the overall structure of each agreement, but it is also a question of how new agreements will be implemented and how the European Court of Justice would play a role.
But this time the EU has made such absurd demands that the UK is discussing non-compliance with the withdrawal agreement. But progress has been marred by reports that France has threatened to veto any deal if it involves too many concessions from the EU. An unpublished British government source told The Times that the French would “turn around the capitals of the EU.” “In the absence of significant progress towards an agreement by the end of the weekend, the likelihood of a deal will fall below 50%,” JPMorgan`s Barr said. Time is running out for negotiations between Britain and the EU, although we continue to believe that the chances of reaching an agreement are accumulated. But nothing is guaranteed and, as we have learned throughout the Brexit process, there is still room for unexpected surprises The chances of extending the transition period beyond January 2021 have remained low at 14%, as time is running out for negotiations. To work, there must be trade agreements and a rapprochement on key issues. Then there is the delicate issue of internal market accounting. The House of Lords voted overwhelmingly in favour of repealing the controversial clauses of the law that effectively give the government the power to repeal parts of the withdrawal agreement.
For now, the government has indicated that it will fight to reinstate these clauses when the bill returns to the House of Commons, and has already indicated that it will introduce another legislation (the Finance Act) that may contain other incendiary kits.