Home Morning Commentary Morning Commentary – Theresa May Pulls Out of Brexit Divorce Deal

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British Prime Minister Theresa May decided to withdraw from the Brexit divorce deal after the European Union refused to accept her demand for a time limit for EU judges to have authority over EU citizens living in Britain. This maneuver was clearly intended by May as a measure to protect British autonomy from the authority of the European Union, which is of course a key reason behind Brexit. The proposal was to allow the EU to continue to have jurisdiction over EU citizens living in Britain until after Brexit is completely. However, the EU refused to accept these terms, but offered instead to allow a small number of cases to qualify for exclusion from EU jurisdiction, but only on a limited bases.

The refusal from the EU to remit legal jurisdiction over EU citizens after Brexit has caused outrage amongst Brexit supporters. They perceive this move as yet another example of unwillingness by the EU to honor British sovereignty. Meanwhile, the financial markets may be expected to respond to this news negatively, since it means that Brexit negotiations are receiving yet another setback, adding to the uncertainty that investors have been dealing with since the original vote by Britain to leave the union. Ultimately, we can expect weakness in the British pound as well as a softening of British equities while the situation is still in limbo.

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