trending Market Intelligence /marketintelligence/en/news-insights/trending/J76Mfs6o1URV-DCZpdeaZg2 content esgSubNav
In This List

Sterling jumps as Merkel says backstop solution achievable by October deadline

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Sterling jumps as Merkel says backstop solution achievable by October deadline

The pound jumped on Brexit optimism after German Chancellor Angela Merkel said an alternative to the Irish backstop can be achieved by the Oct. 31 Brexit deadline, rejecting claims that she set a one-month limit for the U.K. to find a solution.

Merkel said in a conference Aug. 22 that she did not set a 30-day deadline for U.K. Prime Minister Boris Johnson to find a solution to the Irish backstop and is ready to give time until Oct. 31, Reuters reported. "I said that what one can achieve in three or two years can also be achieved in 30 days. Better said, one must say that one can also achieve it by [Oct. 31]," Merkel said.

Sterling rose 1.1% to $1.2257 as of about 11:15 a.m. ET.

The day before, Merkel said the EU would compromise a withdrawal deal if the U.K. could suggest a better plan to replace the existing Irish backstop provision in a month. "It was said we will probably find a solution in two years. But we could also find one in the next 30 days, why not?" she said, according to Reuters. Johnson reportedly accepted the proposal.

The British prime minister had urged the EU to replace the Irish backstop plan with "alternative arrangements," but failed to offer a "realistic" solution, European Council President Donald Tusk said Aug. 20.

Meanwhile, French President Emmanuel Macron supported Merkel's apparent 30-day idea in a meeting with Johnson on Aug. 22 but said he sees little chance of a new deal.

"Just like Chancellor Merkel, I'm also very much confident that with joint intelligence we should be able to find something smart within 30 days if there's goodwill on both sides," Macron said, according to Bloomberg News.

But Macron seemed to contradict his statement by saying, "[W]e will not find a new withdrawal agreement within 30 days that will be very different from the existing one," Bloomberg and the Financial Times reported.