The United Kingdom (UK) after long has struck a deal with the European Union (EU) this Thursday. The news broke after European Commission President Jean-Claude Juncker disclosed the deal hours before the summit of the bloc’s leaders in Brussels. According to British Prime Minister Boris Johnson, the new deal benefits both parties greatly and does push Britain into isolation due to this radical Brexit decision. Although the terms of the deal have not yet been disclosed, based on the remarks of both the leaders, the compromise reached sounds promising. Ties between the EU and the UK seem cordial after the deal as well, which shows the inclination to maintain a healthy relationship that does not affect economies on both ends. According to the tweet by PM Johnson, the deal still offers free trade and friendly cooperation between both sides.
The result of that news also translated positively for the British economy because as soon as the news broke out, the price of the pound went up and British share prices also improved considerably. This is certainly a testament to the fact that both parties involved were solution-oriented and the idea was to minimise damage as much as possible. The next big challenge for Boris Johnson now is to get the British parliament to approve the deal. The deadline they had set for themselves was October 31, however, at this point support looks a bit difficult. The voting session is on Saturday but the Northern Irish Party, Democratic Unionist Party, and the Labour Party have refused to support the deal, each based on different reasons.
These differences are over custom, consent and sales tax arrangements, while the Labour Party believes firmly that the decision should be made by giving people the final say in a public vote. Based on the timeline, it is highly unlikely that the PM will pursue a public vote, however, without significant support in the parliament, weeks of efforts to strike a deal with the EU will go to waste. Choosing to persist in the conflict not only impacts the British economy but also dampens its foreign relations. PM Boris Johnson’s tweet shows a strong will to take back control, a right-wing narrative that is emerging in several economies around the world after the strong pursuit of the globalisation paradigm. This will trigger economies to focus primarily on self-sufficiency and growth.