The U.K. will initiate its exit from the European Union bythe end of March 2017, Prime Minister Theresa May said in a speech thatreiterated her government's will to leave the union while attempting to assuagethe concerns of international businesses.
By triggering Article 50 of the Lisbon Treaty, the U.K.would enter negotiations on the terms of leaving the union and future relationswith the EU, a two-year process unless extended, putting the country on trackto be out of the union in 2019.The deadline was chosen to give her government time to come up with anegotiating strategy but not allow Brexit to be strangled by delays, May saidOct. 2 in an address to the Conservative Party Conference in Birmingham,England.
After the Article 50 move and a promised repeal of theEuropean Communities Act 1972, the U.K. will be an "independent, sovereignnation," May said. Under the "great repeal bill," EU law wouldbe enshrined in the U.K. once the country is out of the EU. The U.K. Parliamentwould then amend or discard EU rules deemed unneeded.
May sought to extinguish any lingering doubts about hergovernment's commitment to implementing the Brexit referendum while downplayingits impact on international and domestic businesses. "The authority of EUlaw in Britain will end," May said, but she quickly followed up with apromise that businesses will have "maximum certainty" about the rulesunder which they operate because of the provision to at least initially leaveEU law in place.
May also reiterated a commitment to free trade andnegotiating bilateral agreements, peppering her address to the national party'sannual gathering with references to a "global Britain."
May's timetable means she does not intend to wait for theresults of national elections in EU pillars France and Germany, whereanti-establishment sentiment has been on the rise.
Donald Tusk, president of the European Council, welcomed the"clarity" of the U.K.'s deadline but implied that there will be nopre-negotiations, tweetingthat the EU will work to safeguard its interests once the formal process begins.
The U.K. electorate voted to leave the EU on June 23, triggering deep marketlosses on both sides of the Atlantic and the resignation of Prime MinisterDavid Cameron.
While markets have largely stabilized since then, questionshang over industries where business is conducted between the U.K. and thecontinent. For banks, insurers and other financialservices firms, among the biggest questions is the future of the regime that allowsthem to operate throughout the EU by establishing a presence in any membercountry.