First France, Now Germany Is Shutting the Door on UK - Forex News by FX Leaders

First France, Now Germany Is Shutting the Door on UK

Posted Wednesday, October 19, 2016 by
Skerdian Meta • 2 min read

A few weeks ago, the French prime minister Hollande called for a hard Brexit, if you remember. His comments were matched with the same tone from the British PM May the following weekend (Or was it the other way round?) and as a result the British Pound got sucked into another dark hole. 

A couple of weeks later two large French banks announced that they will freeze the new staff hiring in London until the Brexit negotiations are over, which might take years. There´s no direct connection between this and the PMs´ comments but the negative sentiment has been growing rapidly, the value of the GBP tells the whole story. Other multinational financial companies might follow suit and turn this snowball into an avalanche.

Today the Germans took their turn at being the bad cop. In the morning there were some headlines in Bloomberg from senior German officials. Here we go:

– Merkel is refusing to grant UK favours such as advance EU/UK negotiations.    

– Some German ministers have been told to avoid contact with British counterparts, so they won´t reveal th negotiating cards beforehand.  

– There will be no official talks whatsoever before Article 50

These comments sound a bit harsh, don´t they? 

That was not all though, in the afternoon the EU official Weber said that the rest of the EU will be extremely tough on Brexit talks and that all the 27 members unify in this opinion. He also said that the British PM May is copying the UKIP politics and that the UK government is behaving arrogantly. UKIP is the British far right party which initiated all this nonsense by the way.  

You see, it can get even harsher. It does sound harsh, but in fact, they are only representing their interests here. The British government has embraced the UKIP politics after the referendum and the arrogance that used to characterize it. Just because their cause won, it doesn´t mean you have to strictly follow their irrational political programme. You can´t take you whole nation on an "all or nothing" bet, plain reckless.

I´m saying this because since the new government was formed, the PM May and her government embraced a hard Brexit policy, playing tough. The recent comments from the EU officials are only a response. UK wants full access to the single EU market and all other benefits, but only a couple of hours ago UK´s Hammond said that the UK will control and restrict the migration from the EU.

It is usually human psychology to feel empathy for the underdog, thus the comments from EU officials seem arrogant. But if you compare them to the ones we have heard from the UK since this thing started they´re just peanuts. 

 

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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