Things are much clearer after British PM speech.
Prime Minister Theresa May offered her most clear vision of Britain’s future relationship with its European Union neighbors, pledging to quit the single market and instead seek a customs agreement with the bloc to deliver “a smooth and orderly Brexit.”
The GBP surged after May’s speech, in which she set out for the first time that her government is determined to make a clean break from the EU and said she would give Parliament a vote on the final Brexit deal.
While saying that she wanted the U.K. to be “a good friend and neighbor in every way” to its former partners, she also warned them not to reject the model she was proposing.
“I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path,” May said in her speech to diplomats in London on Tuesday. “That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend.”
Laying out the government’s Brexit plans with 12 core objectives, May said that she was confident a deal can be reached with the European Union once the trigger to leave is pulled by the end of March. She called for a “phased approach” to implementing the new rules to ensure Brexit is “smooth.”
May offered a series of red lines for the coming talks:
“What I’m proposing can’t mean membership of the single market.”
“I do want us to have a customs agreement with the EU. I want Britain to be free to reach our own tariff schedules at the WTO”
She said she wants to be able to negotiate new trade deals
She wants transitional arrangements for financial services
No more “huge” U.K. contributions to the EU budget
German Foreign Minister Frank-Walter Steinmeier commended May for providing “a bit more clarity” about her government’s plans and for seeking strong ties with the EU in her speech, which was broadcast live on German news channels.
“But our stance remains that the negotiations will only begin when Britain has officially announced its wish to leave” the EU, he said in statement.
Sterling, which plunged on Monday after weekend reports that May was planning to exit the single market, jumped against the dollar and was set for its biggest advance since the global crisis.
