miltiades wrote:Sterling finished the week, following the triggering of Article 50, in a buoyant ...mood, ending the week at almost 1.18 euros , 1.177 and against the US Dollar at 1.252.
Encouraging performance, one hopes that the pound remains steady and manages to gain a little over the two main currencies. You can now buy euros at 1.15 at popular exchange bureaus , remembering of course that you will never obtain the MMR ( Mid Market Rate ).
Theresa May's letter to the President of the EU, Donald Tusk hasn't gone down well, her reference to withdrawing security cooperation unless the UK gets the trade deal it wants has been interpreted by some as rather stupid. Europe faces a security threat and it is prudent that the whole of Europe cooperates in tackling this real threat without preconditions.
I'm glad you are getting a little upbeat about Sterling. Long may it either remain stable or improve. Personally I expect it to oscillate with every perceived nuance of the long negotiating period. As I believe I said some time ago, currency-wise I doubt things will pan out and level for quite a while. Or perhaps, when the clearly unsustainable Euro itself becomes a "volatile" currency.
On your second point. It strikes me that presently, everything the EU comes up with as a basis for negotiations is being perceived by the media (notable it appears to me by the good ole BBC. "B" of course standing for British) as entirely reasonable. Conversely, almost anything in the UK's initial stance is promoted as "a threat" or attempt at blackmail.
Statements like this though are fairly normal for the course in negotiations where there's a lot at stake. Both sides set out various terms - usually quite unreasonable conditions - to establish boundaries for the negotiations. I believe that analysing everything that's said in detail will just mean that people end up not being able to see the proverbial wood for the trees.
On Wednesday Britain apparently (?) did the same thing by tying security to the Brexit negotiations. Although I believe the actually point being made was that without a good deal everything could end up going pear-shaped, including security. That might have set alarm bells ringing in many EU member states, especially the 19 whose combined GDP is less than that of the UK. Life under the Soviet Union has not been forgotten in most of Eastern and Central Europe. Moreover, with America agitating for European NATO members to meet their 2% commitment, rather than freeload (as Germany in particular does), it's going to be an anxious period for some countries. If they can see beyond Junker's posturing.
Britain's military and intelligence assets represent a massive trump card (sorry about the pun) for the UK. Do EU members, particularly the former Warsaw Pact nations, really want to rely on the French and Germans? Or, face the situation where the EU has deliberately damaged Britain's economy, when there was no need. Then expect the UK to ship troops to the likes of Estonia, as right now, to show solidarity and willingness to fight for basically "a small, far away country with people we know little about"? Sorry, can't afford it.
Britain's connection with America and Canada, is another trump (oops!) card, as is the massive influence that the English legal system has over international trade matters. Then there's the small matter of the large amount of money which is remitted to the former Warsaw Pact nations by their citizens working in the UK.
A lot of leavers are perfectly content with no deal and a reversion to WTO terms. That after all is what most of the rest of the World have to do. Much of the British economy will benefit from Brexit, particularly the 80% or so of GDP that's nothing to do with the EU, once a bonfire of the Everest of Brussels originated regulations gets underway in earnest.
We've only just begun but I do fear that Tusk and Co are making the same mistake they did when Cameron went to Brussels last year, with quite modest suggestions he could present to the UK electorate as a movement towards "reform". If there's one thing that will get the Brits back up it's going to be arrogance and immutability. They can do it so much better. It needs to be borne in mind throughout that the result of these negotiations will be a double-edged sword. Try explaining to French farmers who see one of their biggest markets evaporating that it's a matter of "principle".
Let's hope that behind closed doors things settle down, rather than a continuation of the hyped up rhetoric we're being fed at the moment.
. 
