A key hurdle in securing a relatively smooth UK exit from the EU has been passed. The Brexit transition deal preserves the current economic relationship between the UK and the EU for 21 months after the UK technically leaves the bloc in March 2019. Companies in the EU will continue to have unfettered access to the UK market and vice versa, while the UK will contribute to the EU budget as it does now.
Admittedly, a full Withdrawal Agreement still has to be concluded. And the transition deal only kicks the issue of a potential cliff-edge Brexit down the road. Nevertheless, the firmer signs that the UK will not drop out of the Single Market overnight in 2019 reduce the uncertainty facing euro-zone businesses, particularly those in countries with large exposures to the UK.
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