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Comment by cs02rm0 | Hacker News Reader

I think, regardless of where she intends to end up, she always had to start from the perspective of the UK being completely out of the EU. Showing that the UK is prepared to stand on its own two feet. If not prepared to do so, negotiations would be very one sided.

It'll certainly be interesting to see how the negotiations play out.

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Agreed. Look at what happened with the recent Canadian EU deal, which was nearly derailed by Wallonia, the French speaking half of Belgium [1]. A UK EU trade deal will require unanimity from the EU 27. Given the current political climate, that just won't happen. So "hard Brexit" is inevitable. Theresa May is just making a virtue of a necessity. She does have one very powerful negotiating lever: London is Europe's financial capital. When the debt management office of any Eurozone state issues new govt bonds to the primary market the bidders are primary dealer trading desks in London. The ultimate measure of Eurozone govt financial stability is whether an individual govt can attract bids for 100% of a new issue, and at what price. Since 2010 there have been occasions Italy and Greece have failed to get bids for new debt. When that happens Germany and the ECB have to step in.

[1] https://www.theguardian.com/world/2016/oct/27/belgium-reache...

This might be a negotiating lever with the actual trade negotiators, who care about these things and know about such intricacies. But note that every deal with the UK will also have to pass through all the national parliaments in the EU. And there (as in the general public) you won't find much love for banks in general and British investment banks in particular. When Philip Hammond talks about retaining access to "hedging" and "derivatives", to most people those are not things to safeguard but evil market speculation that should be eliminated.

I have the feeling that (from the EU perspective) the opportunity to punish banks with a difficult Brexit will actually make negotiations for the UK harder, not easier.

The banks are already making their plans to relocate into other EU cities prior to Brexit. Hard Brexit is inevitable, unless we just don't leave.

But May won't do that, because she's decided it's the unanimous will of the people that we storm out and slam the doors closed behind us and then barricade them and lay some mines just for good measure.

Exactly - you can't show nervousness like Switzerland did. May is taking the only starting position possible, when performing hostile negociations.

When Switzerland was faced with a similar issue (after citizens voted to restrict EU immigration) it was clear their Government knew straightaway they needed the deals with the EU, so it was impossible to negotiate anything of value.

Britain is politically and economically very important to continental Europe, so May does have some bargaining chips.

"If not prepared to do so, negotiations would be very one sided."

Exactly that, and it's pertinent timing given the noises that Trump is making regarding import taxes, and the implications of those taxes for EU exporters.

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