As 2020 draws to a close, the final curtain of the four and a half year long Brexit drama is now in sight. Great Britain will leave the European Union at 11:00 PM, 31 January, 2020. The largest unknown at the moment is whether or not the two sides complete a post-Brexit trade deal. Time is running out, as is patience as both sides struggle to get a deal in place before the end of the year. Deal or not, Britain is leaving the EU. With that said, it is in the interest of both parties to reach an agreement. Not doing so will bring the prospect of economic damage and border disruptions as a second wave of COVID-19 cases grips Europe.
Today, the European Parliament has set a Sunday deadline for negotiators to reach a post-Brexit trade deal. In light of the coming Christmas vacation, ratifying an agreement beyond Sunday will be difficult for the parliament. The chief EU Brexit negotiator Michel Barnier has said it will be “difficult but possible” to have a deal wrapped up by Friday. His view is certainly the minority opinion. Most other British and EU officials close to the negotiations, and were willing to speak off camera, believe a no-deal outcome is most probable.
Despite the cynicism of many diplomats and politicians, economic news has been largely positive today. European stocks and markets rose on hopes of a trade deal. The optimism was even found in currency markets where the pound and euro were trading strongly against the dollar. The solid economic performance is not likely to last for much longer unless a trade deal comes about. Should the year end without one, European markets will be the first to feel the pinch as yet another wave of uncertainty will arrive.