(Bloomberg) -- The European Union considers it has grounds to take legal action against the U.K. over British plans to breach the agreement governing its withdrawal from the bloc, according to a document seen by Bloomberg.
The EU considers it may have a case to seek legal remedies under the divorce agreement even before the U.K. internal-market bill is passed by Parliament and that it would have a clear justification once the bill becomes law, according to the EU’s preliminary analysis of the U.K. legislation.
The pound erased gains from earlier in the session to trade 0.2% lower after the news.
U.K. Prime Minister Boris Johnson is facing a backlash from the EU and from within his own ruling Conservative Party after his government said it is making its plans to break its commitments to the EU over the Irish border.
The U.K. Internal Market Bill, published earlier on Wednesday, would allow ministers to override parts of last year’s Brexit agreement to ensure companies in Northern Ireland have “unfettered access” to the U.K. internal market.
(Updates with pound in third paragraph, details of bill from fourth)
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