EAMON QUINN: Nicola Sturgeon plans to secure EU customs union

UK prime minister Theresa May will “move heaven and earth” to trigger Article 50 and start its divorce talks with the EU by the end of March, but there is no disguising that London is badly prepared for the looming negotiations, Scottish first minister Nicola Sturgeon told a business gathering in Dublin.

However, she said it was most unlikely the UK-wide referendum in June to exit the EU would be overturned, and that the Scottish government wanted to push London to secure the best possible deal that ensured it maintained as many of the benefits of the current customs union as possible.

Talking to the business group Ibec, she said Scotland shared the concerns of Irish business about the lack of information from London on its plans for negotiations with Brussels.

A hard Brexit was the worst outcome for Scotland, while “the least worst” option for Scotland and Ireland would be the UK staying in the customs union after the divorce, she said.

Ms Sturgeon said she was attracted by the idea of forging closer ties to create some sort of “Celtic corridor” involving Belfast, Edinburgh, and Dublin.

With the City of London exploring the idea of financial visas, Ms Sturgeon said her government was preparing imaginative ideas to help it maintain as many of the current benefits of EU membership as possible.

Scotland wanted to remain in the customs union because the UK-wide vote was narrowly won and because, she said, leading campaigners such as Boris Johnson, now the UK foreign minister, had argued before the vote that Brexit would not necessarily lead to Britain leaving the customs union.

Scottish voters chose 62% to 38% to stay in the EU, compared with a 52% Leave vote recorded across the whole of the UK.

Ms Sturgeon’s government understands the “unique position” of Ireland, saying that Brexit campaigners had not considered the North and the “essential” requirement to keep an open border. She said she detected a hardening in positions in Europe because the UK government has yet to state what sort of relationship it wants with Europe.

Her comments came on the same day that UK chancellor Philip Hammond said the best way to protect the British economy was to support the UK government’s plans to have the most open possible trading relationship with the EU after the country leaves.

Meanwhile, sterling bounced back against both the dollar and the euro, keeping the currency firmly in the $1.23 to $1.26 range it has held for the past two weeks in the absence of new concerns over how Britain will leave the EU.

Against a broadly weaker euro, sterling climbed by as much as 1% to trade back below 85 pence, having just recorded its longest run of weekly gains since early 2015.

Sterling is still almost 10% weaker against the euro compared with before Britain’s vote to exit the EU. But it has climbed 5% since the start of November as the euro has weakened on uncertainty over an Italian constitutional referendum on Sunday and French and German elections next year.

“There remains concern about the Italian referendum and I think that’s likely to continue to dominate activity in Europe for the next few days — that’s probably why sterling is stronger against the euro,” said Société Générale currency strategist Alvin Tan.

Additional reporting: Reuters

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