The U.K.’s new prime minister, Theresa May, promised to begin the formal negotiations for Brexit at the end of March 2017, meaning the U.K. could pull out of the EU by summer 2019.
That announcement was made Sunday and since then the pound fell further against the dollar to $1.27, a drop from an already near 30-year low of $1.30 on Friday.
The prime minister said she will trigger Article 50 of the Lisbon Treaty, which would get the secession started, and noting that since citizens have given their vote loud and clear, it’s time to “get on with the job.”
“We are going to be a fully independent, sovereign country—a country that is no longer part of a political union with supranational institutions that can override national parliaments and courts,” the BBC reported May as saying. The prime minister said a global Britain is possible and that the country will look to strike a new trade deal with the EU as its own sovereign nation.
But May’s announcement is being called reckless by some who have said the prime minister gave up all of Britain’s negotiating cards and that it will be next to impossible to negotiate a fresh trade deal with the EU within the two-year exit timeline.
Now knowing the timeline, the EU can run down the two-year clock and put the U.K up against a wall, so to speak, as it will be more pressed to make a deal before the time is up.
Without a deal and being out of the EU, the U.K. would again face duties on manufactured goods (44 percent of which head to the EU) and the potential dip in the nation’s tax revenue could further plague the economy.
“The negotiation process itself is also likely to be stacked against the U.K. While the British will need a quick deal to minimize uncertainty for investors, the EU can afford to spin things out,” according to the Financial Express. “Even if this is not a deliberate strategy on the European side, the realities of trying to secure a common position among 27 nations—and then secure ratification in all 27 countries, plus regional legislatures and the European Parliament—will be long and laborious.”