The U.K. is not scared of a no-deal exit; how Brexit impact on GBP and Euro? Some football players will lose their jobs after Brexit?

Photo: Internet

British Prime Minister Boris Johnson talked tough on Sunday ahead of a crucial round of post-Brexit trade talks with the European Union, saying Britain could walk away from the talks within weeks and insisting that a no-deal exit would be a "good outcome for the U.K."

Key points in the negotiation 

Irish border.

Changes in trade, customs, immigration checks, local economies, services, recognition of qualifications, medical cooperation, and other matters, following Brexit and thereby the Republic of Ireland–United Kingdom border on the island of Ireland becoming the only external E.U. land border between the U.K. and the E.U.

After the U.K. Parliament voted to leave the European Union, all parties said that they want to avoid a hard border in Ireland, due particularly to the border's historically sensitive nature. Following the United Kingdom's exit from the European Union on 31 January 2020, this border is also the frontier between the E.U. and an external country. The Brexit withdrawal agreement commits the U.K. to maintain an open border in Ireland, so that (in many respects) the de facto frontier is the Irish Sea between the two islands.

Fishing

Fishing has always been an emotional issue in the U.K.'s relationship with the European Union.

Supporters of Brexit see it as a symbol of sovereignty that will now be regained. The U.K. says any new agreement on fisheries must be based on the understanding that "British fishing grounds are first and foremost for British boats".

But the E.U. wants access for its boats and says reaching a "fair deal" on fisheries is a pre-condition for a free trade agreement (a deal with no tariffs or taxes on goods between the two).

So, it's hardly surprising that U.K. and E.U. trade negotiators are struggling to make headway.

Divorce bill

The Brexit financial settlement ('divorce bill') is a sum of money due to the E.U. from the U.K. when it left the E.U. (a process commonly referred to as Brexit) to settle the U.K.'s share of the financing of all the obligations undertaken while it was a member of the E.U. In the Withdrawal Agreement, it is officially referred to as the "financial settlement".

The U.K. Office for Budget Responsibility's estimate of the financial settlement when the U.K. left the E.U. on 31 January 2020 was £32.9 billion.

The U.K. and E.U. began negotiations with differing perspectives based on the bill. The U.K. side saw it as payment for preferential access to the European Single Market, whereas the E.U. saw it as obligations previously agreed to funding the budget round ending 2020 and for its share of longer-range commitments. 

Immigration 

The Home Office said E.U. and non-EU citizens coming to the U.K. would be treated equally after UK-EU free movement ends on 31 December.Low-skilled workers would not get visas under post-Brexit immigration plans unveiled by the government. The E.U. requires Britain to accept free labor movement.

For instance, the policy will impact football players.

While Premier League players are among the country's top earners after the Brexit transition ends, those coming from the E.U. can expect to be treated the same as stars from other parts of the world.

The U.K. government has demanded the Football Association, Premier League, and English Football League, the body that runs the professional club divisions below the top tier, make a joint proposal for how immigration rules should affect football once the country has secured a new trade deal with Brussels.

European footballers will then be expected to meet the same criteria as non-EU nationals to gain a work permit, such as regularly playing for their national team.

To gain agreement for quota changes, the F.A. offered to loosen the criteria for all overseas players to gain work permits to play in England. That could open the door to less-established players from South America, for example.

The Premier League, the top tier of English club football, is fighting the proposals. It suggests they will harm one of the country's great international exports, with clashes between teams stocked with the world's best players viewed avidly across the planet.

Many other aspects of the future UK-EU relationship will need to be decided. For example, Law enforcement, data sharing, and security; aviation standards and safety; access to fishing waters; supplies of electricity and gas; licensing and regulation of medicines.

How will the Brexit affect the GBP?

The immediate aftermath of the Brexit referendum saw sterling declined sharply in value.

And as the vote on the U.K.'s withdrawal deal from the European Union looms, further volatility is expected.

Since June 2016, holidays and imported goods have become more expensive, but U.K. exports have been cheaper.

Exporters, such as carmakers, are importers themselves, buying in raw materials such as oil or copper.

Britons living abroad but drawing a U.K. pension have suffered as the pound has declined.

Photo: BBC

Currency experts think that a softer Brexit could provide a boost to the economy by providing confidence and certainty to companies and consumers who in turn may decide to spend more or take on more staff.

That increased economic activity could prompt the Bank of England to raise interest rates, boosting returns for savers.

Uncertainty With the Euro

There is also the potential for a euro flight if the United Kingdom pulls out. Losing the United Kingdom threatens the political and economic stability of the entire E.U., which already suffers from internal conflict and banking issues. The clear winner from the ongoing drama in the continent would be the U.S. dollar.

Nevertheless, most experts still predict a Brexit to hurt the pound more than the dollar. Even if the euro weakens against the dollar, it might see gains against the pound. Volatility on both ends could decouple the euro from real economic data, creating overvaluation or undervaluation and setting up forex markets for a bumpy ride.