U.K. Prime Minister Theresa May was warned by her Irish counterpart that the upcoming Brexit talks may prove “quite vicious” as a panel of judges prepared to rule on whether she alone can begin those negotiations.
“There are those around the European table who take a very poor view” of the fact that the U.K. decided to leave, Irish Prime Minister Enda Kenny told a forum in Dublin on Wednesday. The argument will be fought “very toughly,” he said, adding that May could start the process earlier than the end of March.
May reiterated in Parliament in London on Wednesday that she’s seeking the best possible deal for the British economy when it splits with the European Union as she prepares to start the two-year withdrawal process early in 2017.
Whether she can trigger the talks unilaterally without the backing of Parliament is the subject of a legal challenge, which three London judges said they will rule on at 10 a.m. on Thursday. The losing side is likely to begin an appeal to be heard at the Supreme Court in December.
Investors have looked to the lawsuit to delay the process of leaving amid concerns that, by prioritizing immigration controls over safeguards for trade and banking, May favors a “hard Brexit” that will cost her country membership of the tariff-free EU single market.
European governments have united in saying the U.K. can’t stay in the market and crack down on immigration. German Chancellor Angela Merkel said again Wednesday that the negotiations must respect the EU’s values, such as free movement of labor.
“Our relations to the U.K. must remain positive and friendly and frictional losses for the economy must be minimized,” Merkel said. “But on the other hand, the 27 member states must stand together and not set standards that would lead to cherry-picking according to whatever they need.”
Her government’s council of economic advisers called Wednesday for “constructive negotiations” to keep Britain in the EU.
“There is still a chance to prevent an exit through constructive negotiations or at least to negotiate a succession agreement which minimizes the damage for both sides,” the council said.
Cypriot Finance Minister Harris Georgiades said in an interview that his country also wants to keep ties between the EU and Britain as close as possible.
Cyprus, a former British colony, “is keen to participate in the negotiating process to ensure that the relationship between the EU and the U.K. is as strong as possible after Brexit,” Georgiades said in Nicosia.
May could be angling for a rupture with the EU for domestic electoral purposes, academics including Anand Menon, professor of European politics at King’s College London, wrote in a report published Wednesday.
“Theresa May and her political strategists have made a calculation that they can benefit electorally from a hard Brexit,” said Menon. “The government is formulating a combination of seemingly left-wing economic policies — industrial strategy, interventionism and investment — with a right-wing approach to things like migration and social affairs.”
Moody’s Investors Service said it would cut the U.K.’s credit rating if the government failed to secure continued access to the core of the single market.
JD Wetherspoon Plc Chairman Tim Martin, one of Britain’s few pro-Brexit executives, said EU politicians should nevertheless be wary of “bullying” Britain, arguing that could mean his pubs end up selling less French champagne, German beer and other drinks from European producers.
“The ultimate sanction will be in the hands of U.K. consumers, should they take offense at the hectoring and bullying approach,” Martin said.
By contrast, London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet said finance executives are not being alarmist when they threaten to move jobs and operations elsewhere in Europe. He stood by an estimate that Brexit could cost 100,000 jobs in London’s derivatives business.
“That whole engine is at risk,” Rolet said. “These are real numbers, they are not calibrated to create either a conservative approach or an alarmist approach.”
Former Chancellor of Exchequer Alistair Darling also advised May not to favor different industries in the divorce, almost a week after she secured continued investment in the U.K. from Nissan Motor Co.
“You can’t possibly segregate bits of the British economy and say that one matters today, that one can wait for a couple of years” Darling said in a Bloomberg Television interview with Tom Keene.