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Commentary & analysis with a focus on European economic policy

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Brexit, the personal and the political

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Last week I was asked to write, for a German audience, a piece on Brexit that was short and “personal but also political”. This is what I delivered. The German version will be out in mid-April in Magazin Mitbestimmung.

As I write these words it is 1000 days since the 2016 referendum that is propelling the United Kingdom, after almost half a century of membership, out of the EU. It seems like an age. And it is just 10 days before the foreseen Brexit Day on March 29th. Yet confusion still reigns as to the outcome. Despite years of debate, all the options remain on the table: crashing out, leaving amicably with a deal and, after all, staying in. [Read more…]

The UK after the draft agreement with the EU27

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The situation is in flux, but here is a short analysis of the situation in the UK (as of 1700 CET, 14.11.18), written primarily for a non-British audience.

The British government and the European Commission have – finally – reached an agreement, at technical level, on how Brexit is to be managed. Details of the almost 500 page document have yet to be released. But the cornerstone is a decision to keep the whole UK within the customs union for the foreseeable future, with partial acceptance of the single market rules for the province of Northern Ireland.

We are far from being out of the Brexit woods, however.

Theresa May will gain the support of her cabinet, despite likely ministerial resignations. The EU27 will almost certainly support the draft.

The next hurdle is daunting, though: May needs a majority in the House of Commons. [Read more…]

UK PMI suggests short-run uncertainty effects severe

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The PMI (purchasing manager index) is not an economic outcome, but a forward-looking indicator of economic sentiment. Still, today’s figures* from the UK and the Euro Area are the first indication that predictions that the June 23 Brexit outcome will have serious short-run costs for Britain, but not so much for the Euro Area, are likely to be borne out.

PMI UK 0716

[Read more…]