Brexit: Enter The Hard Part

Despite last week’s Brexit breakthrough, the road ahead is still littered with obstacles as the UK and EU sit down for the next round of talks this Friday.


Three big problems for British PM Theresa May:

The issues are only getting tougher: May wants to preserve maximal economic integration with the EU while doing away with social and political integration. But the EU more or less insists that the UK can’t have its cake and eat it too — out is out. The next round of negotiations will require genuine tradeoffs.

Her party isn’t fully behind her: May’s own Tory party is split. Last week’s compromise on the Irish border provoked an immediate backlash from pro-Brexit members who viewed it as a capitulation. These Tories won’t accept any final deal that looks too much like the UK is, in fact, still aligned politically with the continent.

The clock is ticking: The two sides have until March 2019 to agree on the future of their economic relationship or else they revert to a very weak level of economic integration mandated by WTO rules — a chaotic outcome which would hit the British economy hard. Are the roughly 500 days between now and then enough? Trade negotiations typically take years, if not decades, to complete.

Why does it matter? Despite last week’s breakthrough, Brexit will remain one of the big geopolitical cliffhangers of 2018.

The danger to informal workers grows: Coronavirus lockdowns have created a world of uncertainty for businesses and workers around the world. But one group of people that could be hit particularly hard are those working in the so-called "informal economy," where workers lack formal contracts, labor protections, or social safety nets. Nowhere is this challenge more widespread than in Africa, where a whopping 85 percent of the work force toils in the informal sector. These workers, which include street vendors, drivers, and the self-employed, don't have the luxury of working from home, which makes social distancing unviable. As a result, many continue to go to work, risking exposure to the virus, because not turning up is often the difference between putting food on the table and starving. What's more, even where governments are trying to provide support, many people lack bank accounts, complicating efforts to get them aid. In Nigeria, for example, some 60 percent of people do not even have a bank account, according to the World Bank.

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As Europe inches past the peak of COVID-19 deaths and the US slowly approaches it, many poorer countries are now staring into an abyss. As bad as the coronavirus crisis is likely to be in the world's wealthiest nations, the public health and economic blow to less affluent ones, often referred to as "developing countries," could be drastically worse. Here's why:

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What's the new normal going to look like? Now that numbers are at least plateauing, if not leveling off in hard hit countries in Europe. An effective lockdown may last 4 - 8 weeks. Once you start pulling back on quarantine measures, what's life look like? What's the economy look like? The idea that life is back to normal anytime soon is really, really overstated.

Assuming workplaces get fully functional with suitable personal protective equipment, feel comfortable that we're not going to get significant additional cases. In the workplace, you organize social distancing in offices, you give people more flexibility on work from home, and everybody in contact regularly with people gets masks. You should be able to get to that point within 3 months in the world's developed economies. They're there functionally in China. That allows you to get the economy going again.

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Ben White, Chief Economic Correspondent for Politico, provides his perspective on the coronavirus-related news in US politics: What's the coronavirus update?

Well, we've gotten at least a little bit of good news that perhaps the rate of deaths in New York City is plateauing and may start to come down. God willing, we'll see if that comes to pass. Also, some indications that if we keep social distancing in place through the end of May, we could see fewer deaths than we worried about and fewer hospital beds need it. So, God willing, that happens.

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