All you need to know about UK’s Article 50 trigger
|The historic triggering of the Article 50 by the UK PM Theresa May is just a few hours away, with the PM having already signed the Article 50 letter, which will be delivered by Tim Barrow today at 11:30 GMT. Thereafter, the European Council (EC) President Donald Tusk will hold a press conference at 13:45 GMT on the UK Article 50 notification.
The UK PM May finally invoking the Article 50 means the process of the Britain to exit EU’s membership commences, after the referendum vote held in June last year showed Brits favoring a Brexit by 51.9% to 48.1%.
What is Article 50?
Article 50 was created as part of the Treaty of Lisbon - an agreement signed up to by all EU states which became law in 2009.
Article 50 outlines the process of leaving the EU and states: “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”
When will the Article 50 be triggered?
Earlier this month, the UK PM May informed the European Union (EU) that she wants to initiate the formal process of leaving the EU on March 29th, so that the UK can be out of the EU by the summer of 2019, depending on the precise timetable agreed during the negotiations.
What next after Article 50 trigger?
Once the Article 50 is triggered later today, the terms of Britain's exit will have to be agreed by 27 national parliaments, a process which could take some years. Some EU leaders believe, it could take as long as 5 years to agree to new trading and immigration policies with the remaining countries In the meantime, the UK will continue to abide by EU treaties and laws.”
Responding to May’s announcement, Mr Tusk tweeted: “Within 48 hours of the UK triggering Article 50, I will present the draft Brexit guidelines to the EU27 Member States.”
Timeline post-Article 50 trigger (via the Sun)
MARCH 31: Donald Tusk will give the EU’s remaining 27 member states’ initial response to Mrs May.
APRIL 29: Emergency summit of the 27 EU leaders to agree on the mandate for their lead negotiator Michel Barnier to conduct exit talks.
MAY 7: French presidential elections final run-off. Many believe serious talks cannot begin until we know who the next French president is.
MID MAY: Michel Barnier draws up EU’s negotiating guidelines based on the mandate given to him. The EU’s council of foreign ministers meets to sign them off.
LATE MAY/EARLY JUNE: Face-to-face Brexit negotiations between Britain and the EU begin.
SEPT 24: German elections, to decide if Angela Merkel continues as Chancellor or is ousted. Difficult for much to be agreed on Brexit until then.
OCTOBER 2018: Both sides want to conclude negotiations six months before Britain leaves the EU to give the Houses of Commons and Lords, as well as the European Parliament and other national assemblies, time to ratify the final Brexit deal.
Why is Article 50 trigger such a historic moment?
The UK will be the first member to leave the EU, once the Article 50 is triggered. The UK’s departure is expected to stir political tensions, as the post-Brexit trade deal and negotiations is likely to be more complicated since it needs the unanimous approval of more than 30 national and regional parliaments across Europe.
We could see a ‘soft’ Brexit landing if the UK agrees to compromise on issues like the free movement of people in order to maintain access to the EU single market. Contrarily, a ‘hard’ Brexit would be inevitable, in case the UK fails to reach a deal for the single market access with the EU.
GBP/USD bounces-back above 1.2400, eyes on Article 50 trigger
The GBP/USD pair has managed to find some bids near 1.2380 region, now taking on the recovery back above 1.24 handle, as investors gear up for the historic moment. The sell-off in GBP kicked-off, as the Japanese traders hit their desks and reacted to the reports of the UK PM May signing the Article 50 letter.
GBP/USD Levels to consider
Valeria Bednarik, Chief Analyst at FXStreet explains, “The pair has an immediate support at 1.2430, the 38.2% retracement of the January rally, with a break below it favoring additional declines towards the 1.2330/50 region. The 4 hours chart shows that the price broke below its 20 SMA which lost its upward strength and veered lower around 1.2520, whilst technical indicators have turned south, entering bearish territory or the first time in a week with sharp bearish slopes, favoring additional declines that can extend down to 1.2345, February monthly low and the 50% retracement of January's rally.”
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