Pound Sterling: Barnier Calls Meeting of EU Fisheries Ministers, Could Progress be in the Air?

Above: Michel Barnier. Photographer: Dati Bendo, © European Union, 2020, Source: EC - Audiovisual Service.

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EU Chief Brexit Negotiator Michel Barnier has called a meeting of EU fisheries ministers for Friday, a development suggestive of potential movement in ongoing trade negotiations.

"The EU's chief negotiator Michel Barnier has called an "urgent" meeting of EU fisheries ministers," says Tony Connelly, RTE Europe Editor.

The news is perhaps the most significant concerning Brexit in a week that has been characterised by little concrete developments, despite a looming deadline for talks to conclude before the transition period runs out.

The initial reaction by Pound Sterling was to recover lost ground when the news broke on Thursday: the Pound-to-Euro exchange rate had retreated earlier in the day but was bumped higher somewhat to trade around 1.1210, while the Pound-to-Dollar exchange rate is softer on the day at 1.3354.

"With the pound having gained ground against the euro over recent months, it is clear that traders either expect a last-minute breakthrough or have simply taken on a more relaxed stance to what originally touted as the worst-case scenario in 2016," says Joshua Mahony, Senior Market Analyst at IG.

The development could however be a positive for the currency as the meeting suggests Barnier might have an offer from the UK on fisheries to put before European countries.

Fisheries remains a key stumbling block to a deal being reached, with the UK wanting to fully reclaim its waters by EU coastal states - most notably France - resisting in order to protect their fishing communities.

Any outright refusal of any offer would be known relatively soon as ministers would be expected to brief against it to the press.

However, silence on the matter would be a positive as it would suggest the gears are in motion to a deal being reached next week.

No news ahead of the weekend would therefore be good news for proponents of a deal, and this could keep Sterling bid in the near-term.

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But, other Brussels-based journalists have been reporting that the development might be over hyped.

"There are no new details expected, negotiations are completely stuck," says Joe Barnes, Brussels Correspondent at the Daily Express.

Indeed, a subsequent Twitter update by RTÉ's Connelly said the meeting is not quite as urgent as initially appeared.

"I am told that reports Barnier will talk with fishing ministers tomorrow are accurate but that the meeting is an update on state of play rather than to notify them on any breakthrough," says James Crisp, Brussels Correspondent for The Telegraph.

UK and EU negotiators are poised to resume face-to-face trade talks this weekend, with negotiators expected in London on Saturday.

There were some reports out this week that said EU Chief Negotiator Michel Barnier might suggest to his UK counterpart David Frost that face-to-face talks were unnecessary given a lack of progress.

But it is confirmed on Friday the talks are to proceed.

"In line with Belgian rules, my team and I are no longer in quarantine. Physical negotiations can continue. I am briefing Member States & European Parliament today. Same significant divergences persist," said Barnier, in a tweet out Friday.

As such, face-to-face talks would imply progress continues, even if it is at a slow pace.

Face-to-face talks were halted last week after a member of Barnier's team tested positive for covid-19, forcing the EU side into a period of quarantine. Despite the setback, talks have continued over video.

"Michel Barnier is heading to London in a bid to help break the deadlock in Brexit talks today, with just five-weeks to overcome a seemingly insurmountable fish-shaped wall in negotiations. Unfortunately, the evident desire to reach a deal from both sides has not been matched by a willingness to compromise, and thus there is little to indicate we will overcome the final hurdles" says Mahony.