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May 17, 2019

Is the Brexit stuck forever?

In its current state, England is scheduled to leave the EU on April 12th, 2019. But despite threats of resignations and snap elections, the UK’s Brexit deal appears to be stuck between a rock and a hard place. And although the British people have spoken, the parliament seems to be divided and any further deadlock could compel May to resign. In the meantime, the Brexit has affected virtually all facets of life in the UK from Irish unionist pessimism to the mental health of those affected.

Luck of the Irish

One of the most difficult Brexit-related pills to swallow is the Irish border. Over 20 years ago, in 1998, Great Britain and Northern Ireland signed the Good Friday Agreement. In the agreement, the hard border between England and Northern Ireland was diminished. The environment of the current Brexit negotiations could threaten that peace process. When the UK leaves, the 500 kilometer border between Britain and Northern Ireland will become the new border between England and the EU. The Irish unionists are the most vehemently resisting any return to the days before the GFA as the result will likely hurt their trade capabilities with the UK. These developments could affect the value of the GBP/USD or hundreds of other CFD assets that can be traded on the Vestle platform.

The backstop

Neither England nor Northern Ireland wants to return to the days of military checkpoints between the two regions. Therefore, the UK and the EU have agreed to implement something called a ‘backstop’. The backstop is a plan that ensures that there will not be a hard border between the two entities despite the nature of any final deal.

The emotional toll

EU citizens residing in the United Kingdom could be the first to be affected by the current Brexit fiasco. Ms. Van Deurzen, a professor of psychology at Middlesex University said that immediately following the historic leave vote back in 2016, European residents who were living in London suddenly felt ‘unwelcome’ in the UK. Several of her patients even reported sleep deprivation as well as loss of appetite in lieu of the anti EU sentiment. They also experienced extreme mood swings. Van Deurzen explains that the same anxiety has returned this year in the form of “loss of hope, delusional outbursts and an inability to carry out everyday tasks”

Can Brexit be cancelled?

In theory, the UK government could cancel the Brexit but as explained above, it would be difficult. The European Court of Justice has allowed the UK to nullify Article 50 with or without the blessing of the 27 member states. If they did that, they would effectively remain in the EU. However, the EU has requested that before April 12th, the UK must “indicate a way forward”. An emergency summit has been set on April 10th. Meanwhile, an online petition requesting the cancellation of Article 50 received more than six million signatures. The legally-binding document includes a £39bn debt owed by the UK (to the EU). It also covers the status of UK citizens living in the European Union and vice versa, as well as discusses a border with Northern Ireland.

That said, the situation can change at any moment. Many traders follow the Vestle news portal, Bloomberg (News - Alert) and other news services to stay up to date.

So where does it stand?

Following many months of intense negotiations, a 585-page withdrawal deal has been reached between the UK and the EU. This document dictates the terms of the separation between the two entities. Additionally, a 26-page statement on future relations has been drawn up. Unlike the withdrawal agreement, this statement is not legally binding. Instead, it covers more of the long-term understandings including defense, security and trade.

The materials contained on this document have been created in cooperation with Vestle and should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 87% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. Full disclaimer:

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