The GBP EUR exchange rate was back above 1.1700 after finding some support last week. The pound sterling will look ahead to employment data on Tuesday with inflation set to follow in the middle of the week. The Article 16 Brexit issues still looms as political headline risk.
The GBP to EUR trades at 1.1719 as the pound seeks to avoid further losses.
Article 16 is not the UK’s problem, says former diplomat
Christopher Meyer, a former British ambassador to the US and Germany, has said that the UK should not have taken on the responsibility for fixing the Article 16 issue. Instead, he argued that the EU should have fixed the problem with its interest in protecting the single market.
The comments come after the UK threatened to trigger the emergency Article 16 legislation that would suspend parts of the Northern Ireland Protocol, which created to prevent a hard border. Previous reports had said the government would trigger the clause after the climate summit.
Mr Meyer tweeted: “In all the fury over Article 16 one thing is forgotten. The UK should never have accepted in the first place the avoidance of a hard border as our problem. It was always the EU’s to protect the Single Market.
“We should have said: it’s your problem, you sort it. We don’t want one.”
The EU has promised a swift retaliation if the UK goes ahead with some even suggesting that they could cancel the Brexit deal.
The United States has also taken the EU side and warned the UK against triggering Article 16.
In another Twitter post, the US Senate Foreign Relations Committee, urged the UK to “respect” the Protocol and Good Friday Agreement (GFA). The Committee warned the prospect of a trade deal with the US rested on it.
“Threats to invoke Article 16 of the Northern Ireland Protocol will harm the people of Northern Ireland. I call on UK to respect the protocol & protect the Good Friday Agreement,” they added.
Coronavirus cases are still surging across Europe
The coronavirus is back as a headwind to European growth this winter as cases have surged.
Dr. Hans Kluge, director of World Health Organization Europe, warned the region was “back at the epicenter of the pandemic”.
On Friday, the World Health Organization said that around 2 million cases were reported across Europe in the previous week prior, the most in a single week since the pandemic began.
In recent weeks, Germany has reported record daily numbers of new cases, while the Netherlands has enforced a partial lockdown. Austria is even moving to a lockdown of the unvaccinated despite the fact that vaccinations are not slowing the virus down in the continent.
Belgium and Denmark have also reintroduced restrictions in what will be a real headwind for the euro. The European Commission only raised its growth forecast for the 19 euro nations last week but said that next year was a grey area due to the path of the virus.
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