EU Prioritizes Penalties Over Trade

As I have commented numerous times in recent weeks, I am increasingly worried about a collapse in global trade.

Every day there are new stories that suggest this outcome.

Today, EU negotiators prioritized divorce-first penalties over trade relationships in a historic mistake that will gain the EU nothing but pain.

"The EU's Brexit negotiators are pushing for a draft UK exit deal by mid-2018 as part of a narrow, divorce-first negotiating approach that would demand an exit bill of as much as €40bn-€60bn.

Brussels' rigid plans for the process, outlined to the FT by senior officials, show it is making a priority of a clean separation settlement — and Britain's payment of a hefty exit charge — over London's desire to focus on refashioning trading relations.

Michel Barnier, the commission's chief Brexit negotiator, has indicated to colleagues that he will pursue Britain for an exit bill based on an expansive view of its liabilities under the EU budget.