Italy's budget standoff, Brexit and what it all means for investors
The U.K. and the European Union have agreed on a draft divorce deal. Now Prime Minister Theresa May faces the risk that some in her Cabinet could resign if they think she’s made too many concessions.
Negotiators have been working through the night this week in Brussels, and they’ve settled on a text, according to a person familiar with the situation. May’s top ministers have been invited to read it on Tuesday night and will meet Wednesday at 2 p.m. to sign off on it.
While the pound rose on this breakthrough -- talks had been at impasse for months -- there are more obstacles that lie ahead. Cabinet is one hurdle to be sure, but her hardest task will be to force it through Parliament, where the arithmetic is looking increasingly challenging.
May’s Cabinet has been long divided on what Brexit should mean. Many have reservations that she’s given away too much and that the U.K. won’t be able to escape the EU’s orbit for years, in a betrayal of the referendum in 2016.
She’s survived the loss of some of key figures in her Cabinet -- former Brexit Secretary David Davis and Foreign Secretary Boris Johnson. If more high profile figures quit, her life becomes complicated again.
The thorniest issue that’s been dogging talks for months is how to avoid a hard border emerging on the island of Ireland after Brexit. The details of the agreement haven’t yet been released, but ministers will pore over the small print before deciding if they can support it.
The risk is that the guarantees May has offered will end up binding the whole U.K. into EU rules and trade regulations indefinitely. Brexit cheerleaders reject that because they want to break free. But pro-EU politicians have also expressed concern about it, including Jo Johnson, a minister who resigned last week.
An EU official, who declined to be named, urged caution, saying nothing is agreed until it’s agreed in London.