Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Morning Brief – Borderline

Morning Brief – Borderline

SGM-FX
Tue 1 Oct 2019

Borderline

 

The best way to solve a problem in politics, almost without exception, is to present the simplest form of the idea possible to maximise the expectation of success that each voter carries. What’s not a particularly grand idea in most scenarios, and certainly not when attempting to do something quickly, is to redefine millennia-old suppositions. Queue Johnson…

 

We know that it’s unacceptable to the United Kingdom and the European Union for there to exist a hard border between Northern Ireland and the Republic of Ireland. But it looks like Boris is sailing pretty close to the wind when interpreting this negotiating redline set out years ago. As the devolved head of Brexit negotiations for the European Union, Michel Barnier will not be able to accept anything in violation of the mandate offered to him by the European Council. So it will come down to the interpretation of Boris’ solution that is internalised in Brussels.

 

What is a border to you? A line in the sand; a cultural divide; a linguistic divide; a military line; all of the above or something different entirely? Whatever your ideological interpretation, what does it look like? Physically imposing; seemingly invisible; 1 inch thick or 100 miles deep? The principle of a borderline is what Johnson is, consciously or not, bringing into the debate. As reported by the Irish broadcaster RTE last night, the Prime Minister is looking for goods checks away from the legal border between the UK and Ireland thereby avoiding a ‘hard’ border that would violate several Parliamentary agreements. However, that same broadcaster, seemingly correct in their observations that Boris is ready to present his deal to Parliament and the EU, also reported that Boris’ vision for the checks are stations scattered about 10 miles from the geographical divide. 

 

The danger then is of creating a kind of no-man’s land, a rhetorical hive of unlawful customs in a strip between the check-line and the legal border. Moving the border 10 miles down the road is not a way to solve the border problem and the EU will be staunchly opposed to this. Hopefully, murmurs coming from Westminster in the early hours of this morning are correct – these rumours suggest the PM is thinking of introducing point of delivery customs checks instead. The benefits and drawbacks of taking no-deal off the table seem balanced today: it unfortunately takes no-deal off the table for EU negotiations but it does prevent the so-called Tory Spartans from believing they can do better this time around. More than three years of Brexit negotiations are coming to a peak this week as the plans are unveiled and Johnson is in the driving seat: buckle up! The Pound has opened approximately in line with its Friday close reflecting investors’ reservations about Johnson’s supposed plan. Expect choppy trading this week and serious upside momentum upon any indications that the EU is amenable to the hide-and-seek border.

 

 

 

Discussion and Analysis by Charles Porter

Click Here to Subscribe to the SGM-FX Newsletter

 

Related Insights

    Get news and insights, delivered directly

    Start your day with a sharp, concise and relevant financial briefing from our team of experts.





    Stay ahead of the curve and get your daily briefings direct to your inbox. By signing up, you agree to our terms & conditions.