UK: Irish border and magical realism - BBH

The UK says it will leave customs union on in a year's time, but it also says it accepts that there cannot be a hard border between Northern Ireland (part of the UK) and the Republic of Ireland, notes Marc Chandler, Global Head of Currency Strategy at BBH.   

Key Quotes

“Nor can the hard border be placed between Northern Ireland and the UK.  The Democratic Unionists of Northern Ireland have given Tory Prime Minister critical support in Parliament.”

“Although many see EU negotiators playing hardball with the UK, they have allowed negotiations to proceed even though the Irish border issue remains unresolved everywhere but in theory.  The UK is pinning its hopes on a technological solution, that when first suggested was dismissed by EU negotiators as "magical thinking."

“The UK's decision to leave the EU is not the cause of the increased tensions in Irish politics but it contributes.  The power sharing arrangement facilitated by the Good Friday Agreement (1998) has broken down.  The Irish election in 2016, where Fianna Fail and Labour was trounced, took place four months before the UK's Brexit vote.   Irish politics are precarious and the UK withdrawal from the EU will change a finely tuned balance.”