03 February 2017

Markets Cheer As England Officially Bades Farewell To EU

PM Theresa May
if it was not clear before, it became transparent last 17 January for Britain after it severed economics ties with the European Union: It's so long to the single market, goodbye to the European Court of Justice and farewell to the freedom of movement for workers.

In a long-awaited speech, Prime Minister Theresa May finally revealed the U.K's hand as it prepares to start EU exit talks. She said the U.K. really and truly wants to free itself from EU governance and stop paying millions into its coffers, but still remain friends, allies and tariff-free trading partners with the soon-to-be 27 nation bloc.

"We want to buy your goods and services, sell you ours, trade with you as freely as possible, and work with one another to make sure we are all safer, more secure and more prosperous through continued friendship," May said in a speech to diplomats and dignitaries beneath the gilded paintwork and chandeliers of a Georgian London mansion.

"You will still be welcome in this country as we hope our citizens will be welcome in yours," she said.

Pro-Brexit British politicians praised the speech, and the pound rallied from recent lows as May provided more details of the path ahead for the split with the EU — and vowed that Britain would remain "a great global trading nation" open to business and talent from around the world.

In her 40-minute address, May said Britain would leave the EU single market of some 500 million people, but "seek the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement."

She said there would be no attempt to cling to bits of EU membership. Britain will "bring an end to the jurisdiction of the European Court of Justice in Britain," May said. It also will impose controls on the number of people coming to Britain from EU member countries, abandoning the bloc's principle of free movement.

May promised for the first time that Britain's Parliament would be able to vote on the final deal reached between Britain and the EU, likely in 2019. However, she didn't say what would happen should lawmakers reject the agreement.

The British pound rallied in response to the clarity. Last 16 January, it had approached US$ 1.20, a near 31-year low, amid fears that Britain was headed for an economy-roiling "hard Brexit." But it rose above US$ 1.23 after May outlined her vision of free trade and strong economic ties.

That includes a customs agreement, although May said she had an "open mind" about what relationship the U.K. would have with the EU Customs Union, which currently prevents Britain from striking trade deals with other countries.

Britain is quitting the single market in order to gain control over immigration — a key issue for many voters who backed Brexit. EU leaders say Britain can't stay in the single market without allowing the free movement of people from the bloc into Britain.