FILE PHOTO: Britain's Prime Minister Theresa May meets with European Union Council President Donald Tusk at 10 Downing Street in London, Britain, March 1, 2018. REUTERS/Frank Augstein/Pool/File Photo
Theresa May meets with EU Council president Donald Tusk. Reuters

EU leaders prepare hardball Brexit summit choice for Theresa May

European Union leaders will give British Prime Minister Theresa May a tough reception in Brussels on Wednesday, warning her to rally support at home for the Brexit deal on offer or be cut loose without one in March.

Mrs May will address the other 27 EU national leaders at a summit before they sit down to dinner without her. Officials said they expected the leaders to tell her they have little more to offer since talks stalled on Sunday and they will step up preparations for Britain to drop out of the bloc with no deal.

Summit chair Donald Tusk warned that the risk of a 'no deal' dumping Britain into legal limbo and border chaos on March 29 was greater than ever. He put the onus on Mrs May to bring a "creative" solution to break the impasse over the EU-UK land border on the island of Ireland.


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Mr Tusk called it a "Gordian Knot", a legend associated with Alexander the Great and used as a metaphor for an intractable problem. Mr Tusk made it clear he did not see Mrs May as a contemporary "Alexander the Great", capable of slicing through the tangle of opposition in London and Belfast over her Brexit plan in order to clinch a treaty with the EU.

The ‘no-deal’ message is sincere enough. It is also a tactic to pressure a negotiating partner the EU views as weak. And it might just help Mrs May by giving her the kind of political theatre useful in persuading Britons she has fought for the best deal.

Paradoxically, the EU leaders also sounded relaxed on the calendar for talks. On Tuesday, officials echoed the mantra that "the clock is ticking" to agree a treaty that parliaments can ratify in time for Brexit. But, sensing more urgency in London, senior officials also said Brussels would "keep calm and carry on", ready to wait till December or even later to clinch a final agreement.

“For now, Britain is negotiating with Britain,” Belgian foreign minister Didier Reynders said, referring to Mrs May’s troubles with her own cabinet and supporters. “We need more weeks to see if we can get a deal. We’ll work calmly.”

Germany’s Europe minister called on Mrs May to “take responsibility and be constructive”. But some diplomats believe Mrs May could be unable to move again in negotiations until after she has steered her budget through parliament in early November.

Citing a German government document, the Frankfurter Allgemeine Zeitung newspaper reported late on Tuesday that the European Commission had offered to allow Britain – "in a goodwill gesture" – to remain in the EU customs union and internal market beyond an agreed transitional arrangement until the end of December 2020.

Leaders will decide at dinner after Mrs May has left them on Wednesday whether to firm up a tentative plan to hold a special Brexit summit in mid-November. But Mr Tusk said they would need to believe that a deal was nearly done – and without some new move from Mrs May in Brussels, that belief seems unlikely to come this week.

“There needs to be a much clearer, sharper messaging on the choice the UK faces,” one senior diplomat told fellow national envoys after talks broke down on Sunday. The EU had gone as far as it could to address Mrs May’s difficulties with her hardline pro-Brexit and Northern Irish allies, he said – now the summit must not let Mrs May think things were just carrying on as normal.

Quite how tough the EU message is to Mrs May after Wednesday’s dinner will depend on her approach, diplomats said. If she brings to Brussels the uncompromising tone they heard a month ago in Salzburg, when name-calling on both sides hit a low, then the EU warnings of impending calamity will step up a notch.

EU chief executive Jean-Claude Juncker will tell leaders after Mrs May has spoken on Wednesday evening about his European Commission’s plans for a ‘no deal’. Officials say that will include how to rush through emergency EU legislation to cope with huge disruption to transport and trade links.

The Commission had planned to release its proposals last week but held off, officials said, because Brexit negotiators did not want to sour what was an increasingly positive mood in talks behind the scenes. The brick wall those talks hit over the Irish border issue has flipped around that logic.

Some EU leaders – notably president Emmanuel Macron of France, which faces questions over intensive cross-Channel trade and traffic – want much more public clarity to show that the bloc could cope with cutting Britain out of EU regulations.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”


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Creator: Steven Knight

Stars: Mark Ruffalo, Hugh Laurie, Aria Mia Loberti

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