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Brexit: We've got a clearer picture of a post-EU world (and many don't like it)

As the U.K.'s ruling Conservative Party gathers for its annual convention, we're starting to get a bigger picture of what the U.K. could look like when it leaves the European Union (EU) – and many people aren't happy with it.

Although Britain has yet to press the "Article 50" button that starts to cut the ties with the EU, Conservative politicians speaking in Birmingham this week have offered a more detailed picture of how the post-EU relationship could look.

While the "hard Brexit" - quitting the EU on the U.K.'s terms - rhetoric might have pleased the party's hardliners, markets didn't like the look of the potential hard-nosed approach and sterling fell to a 31-year-low against the dollar.


Justin Tallis | AFP | Getty Images

U.K. Prime Minister Theresa May said she was not worried about the pound's decline, telling the BBC in an interview that "currencies go up and down" but she could hardly blame markets for getting jittery after she set the Brexit ball rolling last weekend, announcing that Article 50 would be triggered no later than March 2017, giving the first bit of detail on Brexit process timings that we've had.

May campaigned to stay in the EU ahead of the referendum on June 23 but was suspected of being cooler towards EU membership than she let on. And her recent comments have cemented concerns that she will play hard-ball with the rest of Europe.

'We're all Brexiteers now'

On becoming prime minister in July, May placed both pro-Brexit and "Remain" politicians in the top government positions. However, all appeared to take tough stances on what a post-Brexit will look like during their conference speeches this week, showing that May's mantra – that "Brexit means Brexit" – has been adopted whole-heartedly (at least in public) by those in the cabinet.

Home Secretary Amber Rudd used her conference speech on Tuesday to outline controversial plans on immigration, saying British businesses will have to reveal how many foreign staff they employ in a bid to make them hire more British workers.

Rudd said that foreign workers should not "take the jobs that British people should do" and also vowed to limit the number of foreign students on "lower quality courses." Needless to say, the comments prompted a backlash from businesses and universities.

Meanwhile, Health Secretary Jeremy Hunt said Britain would train more doctors so it doesn't have to rely on foreign medics to fill an over-stretched and under-staffed health service.

The Secretary of State for Exiting the European Union David Davis continued in a similar vein, saying Britain would put British workers first after it leaves the EU.

Worryingly for the City of London's financial sector, Davis said that there were no plans to negotiate any separate "deal" to protect the U.K's finance industry during Brexit talks.

This could mean that the City might stand to lose its "passporting rights" which have allowed international banks access to EU markets via the U.K. He also said the auto industry would have no special access to the EU's single market.

Meantime, Defense Secretary and Remain supporter Michael Fallon told CNBC that the cabinet was united in supporting Brexit. "This is a united cabinet. The people have spoken. We're all Brexiteers now," he said Tuesday.

The view from the EU

Some analysts believe that giving more detail on the timing of Article 50 has put the U.K. at a disadvantage. With only two years to negotiate a complex array of post-EU relations after it is triggered, the EU could easily drag its feet during negotiations, effectively leaving he U.K. with little influence, or choice, over its post-Brexit relationship.

While EU leaders have welcomed May's offering of more clarity on the timing of the Article 50 trigger, they have stuck to their position that until Article 50 is put in place, there will be no preliminary negotiations with the U.K. over a Brexit. This means that despite the British government's rhetoric on a post-Brexit world, they know little of how the EU will treat the U.K.

But pro-Brexit politicians say that the EU has nothing to gain from punishing the U.K. in its exit talks. Besides, there are concerns in the continent about the U.K. leaving, according to Clemens Fuest, president of Germany's influential Ifo economic institute.

He told CNBC on Wednesday that Brexit came as a shock to many Germans who see the U.K. as a "close ally in the EU."

"As Britain is leaving the EU, there is a lot of uncertainty coming up about the future and most Germans are aware that the stability of the EU is very much in the Germans' interest so it makes many Germans worry about the future."

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