Last month, the United Kingdom and the European Union passed the first major hurdle on the road to the U.K.’s formal exit from the bloc. The president of the European Commission said that “sufficient progress” had been made in negotiations, which is EU-speak for simply moving talks from phase one to phase two. The U.K. will leave the EU on March 29, 2019, at which point the most likely scenario is that both parties will enter a transition period as they hammer out a new trade deal, a process that could take years. In other words, we are only at the very beginning of Brexit.
There is quite a long way to go in Europe’s histrionic political soap opera. And like most soap operas, this one will have a predictable ending. Compromises will be made and a deal will be signed. The EU – Germany in particular among its members – needs trade with the U.K. just as much as the U.K. needs trade with the EU. The incentives for the two sides to come to a deal are overwhelmi