Squaring circles: EU and Britain plot next Brexit chapter

People pass a Union flag flying on the Houses of Parliament in London. Britain and the EU have reached a historic deal on Brexit divorce terms, but Brussels swiftly warned that even harder talks lie ahead on a future relationship after the split. (AFP)
Updated 10 December 2017
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Squaring circles: EU and Britain plot next Brexit chapter

BRUSSELS: The European Commission and the British government let out an audible sigh of relief on reaching Friday’s historic Brexit divorce terms deal.
Yet numerous questions remain on the future trade relationship between the EU 27 and the bloc’s departing member as the discussions now move on to a new phase at a Dec. 14-15 Brussels summit.
The EU’s chief Brexit negotiator Michel Barnier warned “there is still work to be done” to “consolidate” the progress made to date.
The preamble to the 15-page divorce deal published after British Prime Minister Theresa May’s morning dash for talks with European Commission President Jean-Claude Juncker illustrates the still precarious nature of the deal.
“Under the caveat that nothing is agreed until everything is agreed, the joint commitments set out below in this joint report shall be reflected in the Withdrawal Agreement in full detail,” said the introduction to the text.
The conclusion notes that the deal is conditional on “an overall agreement under Article 50 on the UK’s withdrawal, taking into account the framework for the future relationship, including an agreement as early as possible in 2018 on transitional arrangements.”
Even Friday’s deal itself leaves elements open to question surrounding the thorny issue of the Irish border post-Brexit, along with the size of Britain’s divorce bill and the protection of expats’ rights.
The deal is clear on guaranteeing the post-Brexit rights of Britons already living in the bloc and of their EU counterparts based in Britain with family members able to claim residence.
But there is no mention, for example, of future spouses.
“We demand before we can give green light to the withdrawal agreement, that ... the future free movement and residence of UK citizens will also be guaranteed and this in all 27 Member States,” said Guy Verhofstadt, leader of the liberals group in the European Parliament.
It is not yet clear if British expats will be able to retain their full current rights when they move to another EU country.
Regarding citizens rights, the divorce bill text indicates Britain will bring forward a bill to incorporate them into UK law.
On adoption, the bill’s provisions in relation to citizens’ rights “will prevail over inconsistent or incompatible legislation, unless Parliament expressly repeals this Act in future.”
But it is not clear what will happen if Westminster actually one day repeals the bill.
“Any change by UK parliament to citizens’ rights will be very visible and can only happen via express repeal of treaty,” was how Stefaan de Rynck, a member of the EU negotiating team, commented on Twitter.
There are also elements of ambiguity as to the exact size of the divorce bill, despite the methodology having been agreed to determine how deep Britain must delve into its pockets.
“We cannot calculate exactly the sums in question — all these figures will fluctuate,” said Barnier, although unofficial EU estimations are in the order of €60 billion ($70 billion).
Britain puts the sum at between €40 and €45 billion, though that does not include items such as an EU-guaranteed loan for Ukraine, which could generate costs for all current EU members — Britain included.
Then there is the issue of the border between Northern Ireland and the Republic of Ireland, which almost scuppered the deal over concerns in the North that Britain was headed for a deal entailing a “hard” border separating the former from the rest of the UK.
In the agreement, the UK said it “remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border” between the two.
Britain said if that was not possible, it would propose “specific solutions to address the unique circumstances of the island of Ireland,” including alignment with the Internal Market and the Customs Union rules, while respecting the terms of the Northern Ireland peace agreement.
EU President Donald Tusk has already warned that “the most difficult challenge is still ahead.”
And Jonathan Powell, chief of staff to former British prime minister Tony Blair, suggests squaring the circle may prove a tall order.
“The language on ‘full alignment’ means different things to different people,” Powell told the Financial Times.
“A series of contradictory undertakings have been given and a new separate strand of negotiation on Ireland opened in the next stage.”
— Reuters


Egypt’s central bank raises economic growth forecast to 5.1 percent in current year, 5.5 percent next year

Updated 9 sec ago
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Egypt’s central bank raises economic growth forecast to 5.1 percent in current year, 5.5 percent next year

RIYADH: The Central Bank of Egypt has raised its economic growth forecast to 5.1 percent for the 2025/26 fiscal year and 5.5 percent for 2026/27, up from previous projections of 4.8 percent and 5.1 percent, respectively.

The improved projection is attributed to the anticipated increase in contributions from the non-oil manufacturing and services sectors, with expectations of accelerated growth supported by the continuation of the monetary easing cycle.

This is expected to support real growth in credit extended to the private sector in the coming period, therefore boosting economic activity, according to a statement.

The revised forecast follows Egypt’s 5.3 percent gross domestic product growth in the first quarter of 2025/26, the strongest expansion in more than three years, according to the Minister of Planning and Economic Development Rania Al-Mashat in November.

At the time, Al-Mashat underlined that this acceleration was driven by improvements in productive sectors.

This also supports ministry data released in September showing that the economy expanded 4.4 percent in fiscal year 2024/25, supported by a strong fourth quarter when growth reached a three-year high of 5 percent.

The newly released report from Egypt’s central bank said: “Furthermore, forecasts are further strengthened by an anticipated stronger performance in the extractive sector, underpinned by multiple successful onshore and offshore discoveries of crude oil and natural gas, which are expected to gradually increase domestic production.”

It added: “Additionally, the growth outlook is further reinforced by a projected rebound in Suez Canal activity during the current fiscal year, assuming the normalization of maritime traffic in the Red Sea in light of the recent peace deal in Gaza, which has restored confidence and prompted the return of shipping lines through the Canal, including Maersk and CMA CGM.”

The report said continued strength in manufacturing, services, and Suez Canal activity is likely to support real GDP growth throughout the forecast horizon.

As for inflation, the analysis indicated that annual headline inflation is expected to keep slowing down throughout 2026, although it will remain slightly higher than the original forecast, before returning to the target level by the fourth quarter of 2026.

“As such, annual headline inflation is expected to average 12.5 and 9.0 percent in fiscal years 2025/26 and 2026/27, respectively,” the report said.