Posted on Mar 12, 2019
There are reports that EU officials are preparing for an extension to Article 50 of at least one year.
Martin Selmayr, the European Commission’s Secretary General, reportedly told EU27 ambassadors yesterday a Brexit delay could happen only once, and could be short if the Brexit deal is passed or longer if it does not, as the UK could hold a General Election.
According to an EU diplomatic source, Selmayr told the meeting of ambassadors, “The EU will have to extend to allow time for [UK general] elections and [a] new government so that means until the end of the year .”
He also said that an extension until European Parliament elections will not be useful, as “six weeks won’t fix anything.”
This comes as European Commission President Jean-Claude Juncker wrote in a letter to European Council President Donald Tusk that Brexit should be “complete before the European elections that will take place between 23-26 May this year,” adding that if the UK has not left the EU by then, “It will be legally required to hold these elections.”
Elsewhere, the International Energy Agency (IEA), an intergovernmental organisation acting as a policy advisor to OECD states said yesterday, “Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of international trade and oil demand.” The IEA added, “Confidence in the health of the world economy has deteriorated.”
Meanwhile, a new report by rating agency Moody’s suggests that tariffs under No Deal would have a negative impact on the production capabilities of global automakers who are based in the UK.
In such a scenario, tariffs would be 10% and the agency argues that this would be a hard hit for automakers in the EU bloc who import cars from the UK.
Moody’s vice-president Motoki Yanase said, “The UK production of these automakers is highly interconnected to the EU, and so a ‘No-Deal’ Brexit will create a significant negative impact through various channels, most notably, the cessation of tariff-free automobile trade with EU countries.”
The UK automotive industry is especially vulnerable since 80% of domestic production was exported last year – half going to the EU.
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