Boris Johnson pushes for Brexit deal ahead of EU summit
As the Brexit clock has ticked down over the last week and negotiating parties have continued to attempt to thrash out a deal, the pound has shot up. What happens next will likely have a huge impact on the British currency.
Traders are on edge as British Prime Minister Boris Johnson races to hammer out an agreement to take the United Kingdom out of the European Union before the October 31 deadline.
The pound was trading above $1.28 at 11:45 a.m. ET on Wednesday, and analysts believe it could jump as high as $1.35 or even $1.40 if Johnson is able to secure a deal that avoids a chaotic Brexit that ruptures trade and economic ties. One week ago, the pound was trading close to $1.22.
Volatility is very likely to remain extremely high because sterling is just reacting to the headlines as we have them," said Jane Foley, senior foreign exchange strategist at Rabobank.
Read more from CNN Business on what market analysts are advising their clients with the pound under pressure.
No political party has more at stake in Brexit negotiations than Northern Ireland’s Democratic Unionist Party (DUP).
As talks teeter on the cusp of calamity or consensus, the DUP face the toughest choice in their history: compromise on Northern Ireland’s connection to the UK.
Brexit talks pivot on customs and consensus, or as DUP leader Arlene Foster frames it “respect of [the] constitutional and economic place of Northern Ireland in UK.” In real terms that appears to be coming down to what is euphemistically termed a border down the Irish Sea separating Northern Ireland and Great Britain, something the DUP have rejected before.
For decades the DUP have been a bastion for the province’s protestant Unionists resistant to a rising tide Irish nationalism. Past leaders grew infamous with chants of “no surrender,” determined to keep Northern Ireland an inseparable part of the United Kingdom.
Today’s DUP leaders have got more face time in the past few days with UK Prime Minister Boris Johnson than most members of his Cabinet as he seeks to sooth their jangled nerves.
For Johnson, Brexit is a political calculation. Polls in his party a few months ago revealed they’d dump the DUP if that’s what it took to get Brexit done even though the herculean task of getting Brexit through Parliament becomes nigh impossible without them.
The EU demands, and Johnson agrees, that Northern Ireland must maintain an open border with the Republic of Ireland, as written in the 1998 Good Friday peace agreement that ended decades of sectarian bloodshed.
The DUP sense an existential threat, not just for the party, but on the value they hold dearest, an unbreakable bond with Britain.
Whether the Irish border of significance separating the EU and UK becomes Northern Ireland/Republic of Ireland (RoI) border or Island of Ireland, RoI/GB border gets to centuries of history, of family narratives, of volatile parades and traditions going back to Battle of Boyne (1689), when Protestant King William of Orange triumphed over Catholic forces.
This weight of history sits on the DUP’s shoulders alongside a fear of a future in a United Ireland. Meanwhile the UUP, their NI Unionist political rivals breathe down their neck hoping to reap the spoils of a bad DUP decision.
Many of their voters are farmers and small businessmen whose livelihoods depend on an open border with Ireland. It’s counterintuitive to the party’s raison d’etre yet feeds in to fears of a slow slide towards a united Ireland.
If talks collapse, Northern Ireland nationalist politicians demand a “border poll,” in essence a vote to get rid of the border forever, and detach Northern Ireland from the UK.
The dilemma for the DUP seem multiple and inescapable: Give Johnson too much political wiggle room and they will be eaten by their own but miscalculate and a united Ireland edges closer.
Their voters know no amount of history will put food on their table, pragmatism beckons, and that for the DUP has always been one of their toughest challenges.
Downing Street has announced that a motion has been tabled for Parliament to sit on Saturday from 9:30 a.m. (4:30 a.m ET) until 2 p.m (9 a.m. ET), according to Britain's PA news agency.
According to Boris Johnson's official spokesman, the motion "simply sets out the intention for Parliament to sit on Saturday," and would involve both the House of Commons and House of Lords, according to PA.
If approved, it would be the first time in decades that a special weekend session has been held.
The European Union's chief Brexit negotiator, Michel Barnier, is now due to brief EU ambassadors on Brexit at 7 p.m. local (1 p.m. ET) Wednesday, according to an EU diplomat.
It's the second time the briefing has been pushed back.
The Cabinet meeting between UK Prime Minister Boris Johnson and his Cabinet has broken off early, according to Britain's PA news agency, as the nation continues to negotiate a Brexit deal with the EU.
Secretary of State for Environment, Food and Rural Affairs Theresa Villiers said after the meeting that as far as she knew "negotiations are still continuing" and that "we just have to wait and see."
Villiers added that she believes a deal can be secured in time for Thursday's EU summit.
Meanwhile, Grant Shapps -- the UK's Secretary of State for Transport -- told reporters: "We're getting very close to being able to resolve this," according to PA. "There's nothing I can tell you that you don't already know."
"We're just hopeful -- we don't know but either way we'll be absolutely ready, deal or no deal," he added.
You might not have heard it, but Brexit is hitting a pretty critical moment. With just days to go until the UK is scheduled to leave the European Union, nothing is certain and time is running seriously short.
What's going on?
The UK and EU are in secret negotiations, referred to in Brexit jargon as "the tunnel," trying to reach an agreement that can be presented to the European Council of leaders on Thursday.
Boris Johnson said from the moment he launched his bid to be the UK Prime Minister that he would only negotiate with Brussels if it was willing to open up Theresa May's thrice-defeated Brexit deal, formally known as the Withdrawal Agreement.
If successful, the next step is for the other 27 EU member states to give it the thumbs up or thumbs down when they meet in Brussels on Thursday.
Could a deal be reached by tomorrow?
Speculation as to what is happening is wild at the moment. But the fact that very little official is being said is a sign that both sides are eager to reach a deal. When the EU is angry, its effective briefing network lets journalists know.
It's possible that the EU will ultimately decide there is insufficient time for a deal to be reached by tomorrow, but that it is willing to carry on negotiating. At that point, the summit meeting becomes about (yet another) Brexit extension.
Didn't Boris Johnson promise not to delay Brexit under any circumstances?
He did. But it's not entirely up to him. If the EU27, as the remaining member states are known, agree on a technical extension for talks and to arrive at a deal, they will do so working on the assumption that the UK will have to request one.
Last month, opposition lawmakers in the UK passed a bill that would force the UK to request an extension by 11 p.m. on Saturday, (6 p.m. ET), if no deal with the EU is in place. That letter doesn't need to be sent by Johnson himself, but obstructing it would be a clear violation of a clear law.
What happens if a deal is reached?
There is a slim chance, but if it is, then lawmakers will get their chance to vote on it on Saturday, when Parliament will sit in a special weekend session for the first time in decades. Unfortunately for Johnson, he has several hurdles to leap before then.
Any deal would need approval from his Cabinet. It would then need to be agreed by all EU27 member states, who are suspicious of Johnson's motives. Finally, it would need to get through Parliament. Here, Johnson would need to square off Brexit moderates and hardliners, something Theresa May found impossible.
He will also have to get the Northern Irish DUP on board, and the mood music there isn't good. The DUP has been the single largest stumbling block to any Brexit deal and its leader, Arlene Foster, was not super enthusiastic after a 90-minute meeting with Johnson on Tuesday.
So... what's going to happen?
Look, I'd tell you if I could. The reality is that events are fluid and no one really knows what's going on. Details of what a deal might look like vary depending on whom you talk to, and support for a deal both in Brussels and Westminster looks flimsy.
Basically, between Johnson getting a deal and Parliament voting it through and the Prime Minister breaking the law and being arrested on live television, anything is possible.
The "basic foundations" of a Brexit deal are "ready," and "in seven or eight hours everything should be clear," President of the European Council, Donald Tusk said, according to Agence France-Presse (AFP).
"The basic foundations of an agreement are ready and theoretically tomorrow we could accept this deal with Great Britain," Tusk told journalists in Brussels, AFP said. "Theoretically, in seven or eight hours everything should be clear."
Leader of the Democratic Unionist Party (DUP), Arlene Foster, has shut down rumors that the party had accepted a key aspect of the plan put forward by Boris Johnson, removing a crucial obstacle to an agreement with the EU.
Foster said the sources of the reporter -- a well-connected correspondent with Irish broadcaster RTE -- were “talking nonsense,” and that “discussions continue” with Downing Street.
The stumbling block, at least as it relates to the DUP, is the issue of “consent.”
According to reports, the plan put forward by Johnson gives the Northern Ireland Assembly the chance to vote every few years on whether to continue to endorse the hybrid customs arrangements for the region. In the delicate balance of the Good Friday Agreement, which brought peace to Northern Ireland after decades of conflict, a simple majority in the assembly isn’t always enough on key issues. Both sides of the sectarian divide in Northern Ireland must agree.
The EU fears that giving the assembly a say over customs would effectively grant a veto to the DUP, the hardline unionist party that props up Johnson’s minority government in London. But Johnson needs the DUP’s support to get any deal through Parliament.
DUP representatives have been in and out of Downing Street repeatedly in the last 24 hours. And it doesn’t look like their support is nailed down yet.
“UK & EU negotiators, who have ad nauseam pontificated about the need to respect the Agreement, have no business interfering in the processes for consent as currently set out,” tweeted the party’s Brexit spokesman, Sammy Wilson.
In other news, the London Assembly -- which ensures the London mayor's policies, actions and strategies are in the public interest -- has said it's been asked to pause its investigation into Prime Minister Boris Johnson's alleged relationship with Jennifer Arcuri.
Johnson's faced pressure after The Sunday Times reported that a company run by the tech entrepreneur received tens of thousands of pounds in public funding when Johnson was mayor.
Chair of the London Assembly Oversight Committee, Len Duvall, said in a statement that the assembly "respects" the Independent Office of Police Conduct's (IOPC) request to halt the investigation "and will not in any way interfere with its important work," according to Britain's PA news agency.
“However, the Assembly also has an important role and special powers. We will consider using those powers immediately following the conclusion of the IOPC’s work," Duvall added.
“Subject to that important review by the IOPC, certain people should be on notice that the Assembly may well be knocking on their door sometime soon.”