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Sterling drops upon Brexit deal hurt by surprise legal impediment

March 12, 2019 | Tuesday

European Economy

   

On Tuesday, Sterling drops against the dollar upon Geoffrey Cox, Britain's Attorney General reveals his opinion regarding Prime Minister Theresa May's previous amended Brexit agreement.

Legal advice of Cox on the twitched deal is view as crucial to whether the pledges May received last Monday are adequately in giving wavering United Kingdom's lawmakers. Additionally, the confidence needed to provide her deal with a go signal. There's a second vote for May's deal which is due on Tuesday evening.

On Tuesday morning, according to Cox the legal risk to Brexit still remains. That, despite the late-night concessions in the European Union on Monday. Then he added that the amended documents did not provide Britain such legal means to exit the "Irish backstop" settlements unilaterally.

Furthermore, the said backstop is just a tool used in order to evade the reconstruction of the "hard" border between the Republic of Ireland and Northern Ireland. That of which was erased by the 1998 Good Friday peace agreement among London and Dublin.

Meanwhile, some U.K. politicians don't favor the fact that the said backstop, which was intended to be the last resort, might mean the United Kingdom remains within the EU customs union. That at an unidentified amount of time and is not able to left unilaterally.

Cox in a statement says, “The legal risk remains unchanged that if through no such demonstrable failure of either party, but simply because of intractable differences, that situation does arise, the United Kingdom would have ... no internationally lawful means of exiting the Protocol’s arrangements, save by agreement.”

During 11:30 am on Tuesday (London time), the British currency declines at about one percent. It is to trade amounting to $1.3012. Additionally, it slides down to a near one percent against the euro.

Moreover, May's deal is already been completely denied by the United Kingdom lawmakers once during January. That of which faces another examination on Tuesday evening. Therefore, if lawmakers votes contradicting the deal again, they are to get a vote on Wednesday and Thursday on whether the United Kingdom must leave the 28 member bloc with no deal or should request for a delay on its departure which is scheduled on March 29.

   

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