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U.K. Prime Minister Theresa May and EU Council President Donald Tusk had their first face-to-face meeting since Britain triggered its formal departure from the European Union.
The talks at Downing Street on Thursday gave the pair the chance to diffuse tensions after a senior member of the Conservative Party mentioned the possibility of war with Spain over Gibraltar. After the meeting, Tusk tweeted that the talks were going well, while the prime minister's office released a statement noting the “constructive” approach of the EU's draft Brexit guidelines.
On the subject of Gibraltar, the British territory on the southern tip of Spain, the prime minister reiterated Britain's position that the enclave's sovereignty couldn't change without the consent of its people.
Stout Challenge
The journey of a Guinness, one of Ireland's most famous exports, shows the potential cost of the U.K.'s decision to leave the EU.
The dark stout's ingredients are brought from across Ireland to Dublin, where water, barley, hops, and yeast are mixed and brewed. The beer is then pumped into tanker trucks and carried north to Belfast, across the now-invisible 310-mile frontier between the north and south of Ireland. There, it's packaged in cans and bottles before being shipped south across the border again for distribution around the globe.
Will Brexit put up roadblocks in Guinness's way? While Ireland, the U.K. and the EU are adamant there will be no return to the controls in place during the violent sectarian conflict in Northern Ireland, the reality may be more complicated. Brexit could cut trade flows between Ireland and the U.K. by as much as a fifth, the Economic & Social Research Institute estimated.
“For me, there's no question, there has to be some sort of customs visibility on either side of the border,” said Robert Murphy, a former Irish customs official.
Irish foreign minister Charlie Flanagan told the BBC that the decision to leave the EU could be “painful” for both the U.K. and his country.
Unilever Tussle
Unilever is thinking of making a big choice: London or Rotterdam? The consumer-goods giant might do away with its long-standing structure of maintaining separate corporations in the U.K. and the Netherlands. Both countries are likely to put up a fight to keep the headquarters.
The fate of the dual-nationality setup is under review again because it has complicated Unilever's plans to divest its spreads business.
The company found itself at the center of a Brexit controversy last year, when a dispute over the pricing of products like Marmite briefly prompted Tesco to pull the yeasty spread and other items off its online stores.
Brexit Bullets
- Germany will be just fine after Brexit because of its strong global market position, the country's economy minister Brigitte Zypries said
- Greece is concerned about the fate of Greeks living in the U.K., foreign minister Nikos Kotzias said
- UKIP Welsh Assembly member Mark Reckless said he's leaving the party
- Jeroen Dijsselbloem isn't becoming any more optimistic about Brexit. “The longer I think about it,” the Dutch Finance Minister said, “the more worried I get”
- Downing Street backed the U.S. airstrikes in Syria, calling them an “appropriate response” to chemical weapons attacks.
On the Markets
Bets against U.K. retail stocks “kicked into overdrive” after Article 50 was triggered last month and now represent 3.3% of shares outstanding, the most in two years, IHS Markit analyst Simon Colvin wrote in a note Thursday. Ocado, William Morrison and Sainsbury are the sector's most-shorted stocks, while Marks & Spencer shorts have doubled this year, he wrote.
Meanwhile, the Bloomberg Brexit Barometer fell slightly on Thursday as the Bank of England's Gertjan Vlieghe said he believes consumer spending is slowing. The barometer slipped to 39.4, still within the “partly cloudy” range.
And Finally...
Iconic British actor Sir Michael Caine said he backed Brexit because he would “rather be a poor master than a rich servant.”
Caine, star of Alfie, Zulu and Escape to Victory, told Sky News that “it wasn't about the racism, immigrants or anything, it was about freedom.”
Some people tweeted references to the closing scene of another Caine film, The Italian Job, which ended with a bus teetering on a cliff edge.
Simon Kennedy is away.
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To contact the author of this story: David Goodman in London at dgoodman28@bloomberg.net.
To contact the editor responsible for this story: Lisa Fleisher at lfleisher2@bloomberg.net, Andy Reinhardt
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