UK: Missing the EU's point - BBH

Over the last couple of week, the UK issued nearly a dozen position papers that laid out its emerging views on a range of issues that largely related to the post-Brexit relationship, notes the analysis team at BBH.  

Key Quotes

“As we looked through the topic and papers, it dawned on us that the UK was missing the EU's point.  Given our understanding that once Article 50 was triggered, the initiative went to the EU, we thought this was significant.  Yesterday, the EU's chief negotiator Barnier called the UK to task, arguing that it had still not addressed the preliminary issues.”  

“These preliminary issues which the EU insists on addressing first involve the terms of the separation.  Given the organic growth over the last 40 years, and the complexity of the issue, we suggest is more like an amputation than a divorce.  Juncker echoed these remarks.  This is important because the EU Summit is about eight weeks away, and it is then that if there was sufficient progress on the preliminary issues that the next phase could begin, which involves the issues that are dear to the UK.  While brinkmanship tactics can be expected, the chasm is still wide.”

“A Bloomberg reporter captured the UK's exasperation:  "The UK camp believes negotiations could progress if Barnier's team did not follow its mandate to the letter."   If it is a fair assessment, it suggests a certain naivete and unpreparedness on the part of the UK.  At the very least, one should expect one's adversary to stick to the letter of the law in these matters.  Of course, other scenarios may be considered, but isn't the letter of the law the base case?”  

“The weak dollar environment is allowing sterling to continue to recover.  It had recorded two-month lows last week near $1.2775 and had strung together a four-day advance that carried it to nearly $1.2980.  However, it is no match for the euro and other European currencies.  The euro reached GBP0.9300 today.”