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MNI EUROPEAN MARKETS ANALYSIS: US Yields Tick Up, JGBs Steady
FRANCE-PM Frontrunner: 'Jury's Out' On Macron; Causes International Blowback
At a hustings held as part of the Conservative party leadership contest, frontrunner to become the next UK PM, Foreign Secretary Liz Truss was asked as part of a series of quickfire questions, 'President Macron; friend or foe?', to which she answered 'the jury's out'.
- While the response drew applause in the room, the reaction from further afield has been harshly critical of Truss' ambivalent comments about one of the UK's oldest allies.
- Germany's ambassador to the UK, speaking to the BBC, stated that, “I would say that the relationship with France is of crucial importance for the United Kingdom, so my recommendation would be really to look for a relationship that is as close as possible."
- Shadow foreign secretary David Lammy stated the comment showed "a woeful lack of judgement" from Truss, and that she had insulted one of "Britain's closest allies". An unnamed Conservative minister stated Truss had "completely undermined our relationship with France", while former Conservative foreign minister Alistair Burt tweeted that the Foreign Secretary had made a "serious error".
- The relationship between the UK and France has already come under strain in recent years.
- Paris was viewed by the UK gov't as one of the Brexit hard liners, intentionally seeking a poor deal to 'punish' the UK for leaving the EU and to make itself a more attractive investment destination in comparison.
- At the Elysee Palace, the UK has been viewed as an unreliable ally, particularly due to its role in creating the AUKUS alliance, that saw Australia cancel a French nuclear submarine deal at the last moment.
- Both sides have criticised the other for perceived inaction on the issue of migrants crossing the English Channel, while French MEPs have this week sought legal redress from the European Commission regarding what they say is 'unacceptable' pollution of the Channel and North Sea with UK sewage.
- In the likely event Truss becomes the next UK PM on 6 September, there appears little short-term prospect of an improvement in relations with either France or the wider EU. Brussels remains staunchly opposed to the Northern Ireland Protocol bill going through the UK Parliament at present, a bill spearheaded by Truss, who led negotiations w/EU figures in recent months under PM Boris Johnson's gov't.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.