European Commission is ready to start negotiations on Brexit - Rabobank

Stefan Koopman, Market Economist at Rabobank, notes that the European Commission has published a recommendation which said that it’s ready to start negotiations on Brexit.

Key Quotes

“It also reiterated its position that these negotiations should have a twophased approach, which prioritises the rights of EU-citizens living in the UK and the financial settlement. If there’s “sufficient progress” on these fronts, the negotiations would then move to the second phase in which the future relationship between the UK and the EU27 is on the table. The press release that accompanied yesterday’s events is surprisingly readable, by the way.”

“According to Barnier, who is in charge of negotiations on the EU side, the move to Phase 2 could be somewhere around October/November. He however then admitted that this might be somewhat too ambitious, as “some have created the illusion that Brexit would have no material impact on our lives or that negotiations can be concluded quickly and painlessly”. True or not, the EU’s “illusion” soundbite is becoming as annoying as Theresa May’s “strong and stable” very quickly.”

“There are now reports flying around that the Brexit bill would amount up to EUR 100bn, rather than the EUR 60bn that has been floating for a while. The timing couldn’t be better: Theresa May accused EU officials of meddling in the UK election and then suggested that the EU deliberately doesn’t want Britain to prosper. Whether she was being cynical or paranoid, the campaign mode is clearly ON! Politicians know this, so she will be forgiven. Paradoxically, this even more ludicrous amount might actually support May, as a higher opening bid helps her to sell any discounts as a political win at home. It indeed seems fairly reasonable that the final net tally would be much lower than this amount.”