Prime Minister Theresa May claims that a Brexit deal is still “achievable.” The announcement comes after tensions rose due to severe differences in negotiations between the European Union and the United Kingdom.
The major sticking point in the negotiations is the Northern Ireland border.
Critics claim that May’s hard stance on the issue has stalled negotiations, which may be stuck in “limbo” as a result. Germany’s Chancellor Angela Merkel seemed to join the critics and boost their claim when she said that a deal was looking “more difficult” because of the Northern Ireland border issue.
Merkel claims that time is pressing and is urging both sides to continue negotiating.
May continues to seem positive about the negotiations, claiming that she will continue working with European partners to get a deal done.
The disagreements in the negotiations have led to the GBP/USD exchange rate quoted by forex brokers losing value ahead of Wednesday’s Summit, EUR/GBP is also expected to remain volatile as sensitive Brexit discussions continue.
The pound additionally lost value against the Australian Dollar, losing 0.5% on Monday.
Wednesday’s Summit between the UK and EU leaders is meant to mark significant progress on an agreement. The EU wants a “backstop” that would allow for an open border in Northern Ireland which would remain an EU member state, outside of the Republic of Ireland and the EU.
Britain negotiators met in Brussels in an unexpected Sunday meeting with EU officials, but no progress on the matter was made. EU negotiators were expected to meet with ministers in Luxembourg on Monday, discussing technical outlines of a deal being made.
Jeremy Hunt, UK foreign secretary, claims that he is uncertain if a deal will be reached this week or not. Hunt believes that despite one or two “very difficult issues,” that a deal will be made in the coming weeks.
Border removals in Northern Ireland were part of the Good Friday Agreement, which brought peace to the region. Fears of strife in the region are growing, as the UK’s stance continues to hold up Brexit negotiations.
European markets remained stagnant on Monday, with the Stoxx 600 rising just 0.6%. The FTSE 100 rose just 0.48%. Europe’s financial stocks and industrial stocks both led losses on Monday, falling 0.7% as a whole, while Hays fell 3% in Britain.
Investors will look towards Wednesday’s Summit for signs that the two parties are coming closer to an agreement, but markets are expected to remain volatile until significant progress has been made.