Yahoo Finance Draft Brexit deal on the future UK-EU relationship 'agreed'
Britain and the European Union have agreed on a draft deal on their future relationship, marking a significant step towards finalising an overall Brexit deal this weekend.
UK prime minister Theresa May presented her plans to members of parliament on Thursday, saying Brexit is “within our grasp.”
But the leader of the opposition Labour party, Jeremy Corbyn, called the new document “26 pages of waffle.”
“This is the blindfold Brexit we all feared,” he said in the House of Commons.
The European Council confirmed earlier in the day that the political declaration had been “agreed in principle,” covering everything from trade to security.
The declaration follows UK prime minister Theresa May’s meeting in Brussels on Wednesday evening (21 November) with European Commission president Jean-Claude Juncker.
READ MORE: The crucial document leaked ahead of Brexit summit
The document will be now considered by representatives of each EU member state before Sunday’s summit.
Council president Donald Tusk said in a tweet:
I have just sent to EU27 a draft Political Declaration on the Future Relationship between EU and UK. The Commission President has informed me that it has been agreed at negotiators’ level and agreed in principle at political level, subject to the endorsement of the Leaders.
— Donald Tusk (@eucopresident) November 22, 2018
In an effort to ensure EU leaders sign up, May said she spoke with the Spanish prime minister about the contentious issue of Gibraltar.
She said: “The agreement we have reached is between the UK and the European Commission. It is now up to the 27 leaders of the other EU member states to examine this agreement in the days leading up to the special EU council meeting on Sunday.”
May will meet Juncker again on Saturday and then take part in the main EU summit on Sunday, where parties hope to sign off on both the 585-page Brexit withdrawal agreement and the updated political declaration.
READ MORE: Why May’s Brexit trade plan wishlist falls short
May will then have to focus on getting her deal through parliament in the UK, which will be the toughest hurdle yet.
Last week, May first revealed that she had agreed to a draft Brexit withdrawal agreement with the rest of the 27 nations in the bloc. However, it has since thrown the UK government into chaos, with criticism pouring in from both the opposition and from within her own party.
After a flurry of one-to-one meetings with ministers the morning after the deal was announced, May lost two junior ministers and two front benchers (including Brexit secretary Dominic Raab). Meanwhile, politicians within her own party have been rallying to put together at least 48 letters — the equivalent of 15% of MPs — to trigger a vote of no-confidence.
If this does happen, it would trigger a leadership contest, potentially lead to a general election and ultimately risk a delay in sealing a final Brexit deal.
READ MORE: The huge hole in May’s immigration pledge post-Brexit
Market movements
The pound against the US dollar (GBPUSD=X) and the euro (GBPEUR=X) jumped on the news of an updated agreement:
“Reports this morning that the EU have agreed to a draft deal on future trade relations has seen sterling bounce, but the currency is still much weaker than it was eight days ago, before Raab’s surprise resignation,” pointed out Hamish Muress, currency analyst at OFX, in a note to clients.
“The post-Brexit trade relationship has been pushed to one side over the last few weeks as focus shifted to the backstop issue in Ireland, as that issue remains a stumbling block for May. All 27 members of the EU now need to ratify the proposed deal, and Spain is dragging its heels,” he added.
“The Irish border issue has now been kicked down the road, and even if there is determination to solve this, the proposed deal doesn’t currently have enough votes to pass through parliament, meaning the spike in sterling may not have the legs to last even till the weekend.”
With files from Yahoo Finance’s Alanna Petroff and Luke James
