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The EU's biggest Brexit decision will happen this week

Lianna Brinded
Head of Yahoo Finance UK
EU will decide on Boris Johnson's Brexit deal this week. Graphic: Getty

The European Union will decide this week whether a Brexit deal is possible, which will fundamentally alter the decision course of parliament before the Brexit deadline on 31 October.

French president Emmanuel Macron told UK prime minister Boris Johnson that all remaining 27 EU members will make their decision by the end of the week after they discuss whether a proposed Brexit deal can "respect" the bloc’s principles and is likely to be passed through parliament.

"The negotiations should continue swiftly with [chief EU Brexit negotiator] Michel Barnier's team in coming days, in order to evaluate at the end of the week whether a deal is possible that respects European Union principles,” said a French government official, ahead of the EU summit on 17 and 18 October.

READ MORE: Report emerge of Boris Johnson asking EU for Brexit extension

While Johnson told Macron that he thinks a deal is possible, he also responded by saying that the EU should not be "lured" into believing that there will be a delay to Brexit beyond the Halloween deadline. However, three days ago, government papers submitted to a Scottish court revealed that Johnson will send a letter to the EU asking for a Brexit delay if no deal is agreed by 19 October.

Johnson had said before the bill was passed in early September that he would rather be “dead in a ditch” than ask the EU for another Brexit extension and has referred to the binding act of parliament as the “Surrender Bill,” a phrase that has drawn widespread criticism.

Johnson is bound by law, under the Benn Act, to request a deal if one is not agreed by 19 October. However, it is up to the EU to decide if it thinks a deal is possible and also whether an extension is worth it. If it doesn’t think either will happen, it is highly likely that there will be a no-deal Brexit.

READ MORE: France: EU won't approve Brexit delay amid major no-deal prep underway

On 8 September, France declared that it, as well as the EU, will not allow Britain to have an extension beyond the 31 October Brexit deadline.

In an interview with Europe 1 radio, France’s foreign minister Jean-Yves Le Drian said: “It’s very worrying. The British must tell us what they want. We are not going to do (extend) this every three months.”

Britain was originally meant to leave the EU on 29 March this year, but former prime minister Theresa May secured an extension with the bloc to try and push her Brexit deal through parliament. That extension was until 31 October this year.

The pound against the US dollar (GBPUSD=X) is slightly down on Monday morning at $1.2313 as investors await the decision to come later this week.

Chart: Yahoo Finance