Whilst Theresa May and the Cabinet discussed the 500 page draft proposal throughout yesterday afternoon, leaders from the EU27 member states also met, but in stark contrast decided not to review the 500 page document. The leaders in Brussels headed by Michel Barnier instead watched a presentation on the draft agreement and no deal planning arrangments. Michel Barnier wanted the green light from Theresa May before they got their teeth into the actual document. Members of the 27 nations were reportedly seen to be leaving their meeting in Brussels with unopened cardboard boxes filled with documents in anticipation of Theresa May’s statement.

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As soon as the Prime Minister delivered to the press that a majority decision had been reached, a press conference held by Michel Barnier followed. In this speech it was acknowledged that the backstop agreement had evolved considerably over the last 10 months. The key piece of information was that the EU and UK agree to create an EU-UK customs territory in the event that the UK and EU fail to negotiate a trade deal within the transition period.

EU Summit

What next for the EU and how could this impact a GBPEUR exchange?

It’s key to note that the 27 member states only got their eyes on the 500 page text yesterday evening, therefore scrutiny should follow in the coming days. Already reports are suggesting that certain countries believe Michel Barnier has given too much away to the UK in the final weeks of negotiations. For example questions have been raised in regards to the current common fisheries policy. The EU want to be able to continue to operate their fleets in British waters however within the text the wording is not clear which has raised questions from both sides of the channel. This could be a major stumbling block in the weeks to come as both parties will want to know the plan moving forward.

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