© REUTERS/John Stilwell/Pool

The Brexit deadline of March 29 has come and gone, with no end to the turmoil in sight.

The Withdrawal Agreement negotiated by the British government with its 27 EU partners in Brussels has been resoundingly rejected three times by the House of Commons at Westminster, thanks mainly to the opposition of hardline Brexit rebels on the Conservative side.  Yet no other plan for an alternative Brexit has won a majority. The government is divided, the opposition is divided, and so is the country at large.

Up to one million demonstrators marched in London calling for another referendum, six million signed a petition calling for outright revocation of the request to leave the EU, while thousands of angry pro-Brexit campaigners gathered in Parliament Square to denounce their MPs as traitors for failing to deliver Brexit on time. Passions are running dangerously high. Death threats on social media are a frequent occurrence for many outspoken MPs, and the political establishment is in virtual meltdown.

Parliament has attempted to seize control of the process, but so far with little effect. The prime minister, bitterly criticized by pro-Brexit rebels for her failure to deliver their goal, has promised to resign if they will only change their minds and vote for her deal. Most of them still refused to budge. And the 10 Democratic Unionist party MPs from Northern Ireland on whom she relies to have any majority have declared that she can bring the withdrawal agreement back to parliament 1,000 times, and they will never support it. The irony is that it is a caucus of pro-Brexit rebels, plus the DUP, that have blocked the prime minister’s deal, because they see it as locking the UK to the EU, even after it has left.

Reaching Out

Now at last Theresa May has done what she should have done when she lost her majority in 2017—if not in 2016 when the referendum split the nation by 52/48—and reached across the parliamentary divide to seek a compromise with Jeremy Corbyn, leader of the Labour party. Could it break the deadlock and produce a Brexit agreement? It seems highly unlikely.

For a start, there is very little trust between the leaders or the parties. May’s move is seen as a trap by many Labour MPs, who fear that the prime minister is simply trying to get their finger-prints on a Brexit plan that has been entirely dictated by the demands of her divided Conservative party. And it is seen by the Brexiteers on her side as another desperate attempt to win their votes for the Withdrawal Agreement, by threatening a “soft” Brexit compromise instead—or no Brexit at all.

Indeed, by the very act of reaching out to the Labour party, whether the gesture is genuine or cynical, May has further infuriated her rebels and made them more likely to reject her deal. As for winning Labour votes, by promising to resign in the near future she has alienated potential soft-Brexit sympathizers. They fear she will be replaced by a hardline pro-Brexit Conservative leader like Boris Johnson or Michael Gove.

Stubborn Leaders

May and Corbyn share one personality trait: neither is naturally pragmatic nor inclined to compromise. Both are stubborn ideological leaders who won their way to the top because of their single-mindedness—May on a platform of controlling immigration, Corbyn as a devotee to a far-left socialist agenda. The difference is that May is obsessed by the need to preserve party unity, whereas Corbyn is a serial rebel against former party leaders.

The second factor compounding the search for a compromise is that neither can be sure of delivering a united party, or enough votes in parliament, to get an overall majority afterwards. They are neither loved nor respected in their own parliamentary party ranks. They are not natural persuaders.

May’s dilemma is that almost anything she might agree with Corbyn would split her party. His top line is to add a commitment to a permanent customs union with the EU, which would do much to avoid the need for a post-Brexit hard border between Northern Ireland and the Irish Republic—something everyone wants to avoid, for fear of destabilizing the peace process.

But a customs union would mean that a post-Brexit government would be unable to negotiate its own bilateral trade deals, which is an article of faith for the Brexiteers. A Norway-style deal involving membership of the EU’s internal market would require British acceptance of free movement, another “red line” for May and many Conservative backbenchers.

A “Confirmatory Vote”?

If a customs union would be worse for May than Corbyn, another referendum on any deal—now called a “confirmatory vote”—would split both parties. Labour is committed by its party conference to pressing for one, at least as a last resort to break the deadlock, but a vociferous Labour minority is adamantly opposed. Many are Corbyn’s closest allies.

Precisely because a referendum is equally objectionable to both leaders, it might be an acceptable compromise. But May will try almost any other way out before she agrees. So a request to the European Council for a long extension seems unavoidable, even though May says she wants a short one. That is because she is desperate to avoid holding the European elections in the UK at the end of May.

It is not simply a matter of principle. May argues that voters will not understand why they are still electing MEPs when Brexit is supposed to be happening. Her objection is also party political. Both the big parties would probably fare badly in the poll, because of their internal divisions over EU policy. As an election based on proportional representation, it will favor the small parties, both pro- and anti-EU. That is another reason why May will do almost anything to get her Withdrawal Agreement approved before May 22, including a pact with the devil, alias Jeremy Corbyn.

No Revocation

Another escape route from Brexit which both leaders are scared of would be outright revocation of Article 50: a unilateral withdrawal of the UK request to leave the EU. That would be clean and quick. It would simply stop the process. It would remove the uncertainty that is wreaking havoc in the economy. But both May and Corbyn are fearful of a furious backlash from Brexit voters if such a thing were done by parliament, without the cover of a second referendum. The Conservatives would certainly split. So neither is going to take the initiative.

For Corbyn, Brexit is not the most important question. He has always been a euroskeptic, even though his party is heavily in favor of remaining in the EU. In his heart, he would like Brexit to happen. But if it is going to be a mess, he wants the Conservatives to get the blame—and then fight a general election to become the first hard-left Labour leader in 10 Downing Street, implementing a genuinely socialist policy.

On the one hand, he does not disagree with much in May’s withdrawal agreement. On the other, he must keep his party united and keep clear of being blamed for the shambles. Hence his willingness to talk, in the hope of a failure which leaves May appearing more intransigent.

Radical Ideas

A long extension of the Brexit deadline, contemplated in Brussels, will solve nothing on its own. But it would allow time for a general election or for another referendum. It would also allow for other more radical ideas, such as the formation of a government of national unity, or some sort of national convention, or citizens’ assemblies, to attempt to heal the great divide in British politics.

The trouble is that none of the radical ideas appeals to either May or Corbyn. Indeed, although Corbyn pays lip service to the need for a general election, he would be unlikely to win. It would almost certainly produce a hung parliament again, with Labour’s only prospect of a majority would be in coalition with the pro-EU Scottish National Party.

A government of national unity might emerge. In which case, both May and Corbyn would be side-lined. Until they are, the prospects for progress and some sort of reconciliation in British politics look bleak.

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© REUTERS/Toby Melville

The European Council summit resumed on Friday morning in Brussels with a plethora of subjects on the table: relations with China, industrial policy and climate change among them. The agenda had become so overloaded after the Brexit talks the previous night dragged on so long that all other business was delayed.

EU leaders are not happy about it. They are tired of having Brexit hijack these summits, held just four times a year. Frustrations boiled over last night after the British prime minister, Theresa May, was unable, after 90 minutes of questioning, to explain to the other 27 leaders how she could possibly find a way out of the Brexit impasse.

The EU27 had been set to approve a draft text that would have granted the UK an extension until 22 May, on the condition that the British Parliament approves Theresa May’s withdrawal deal next week. By the time May left the room, there wasn’t a single leader who had any confidence that she could get her deal passed, according to EU sources. Desperate to avoid a last-minute emergency summit in Brussels next week, they had to move to Plan B.

After hours of talks that dragged on to midnight, they decided to grant the UK an unconditional extension to April 12—the date by which the UK would have to start preparing for EU elections in May. Should the UK Parliament approve the withdrawal deal next week, the UK can get a further extension to May 22 (the day before the EU elections) to complete the legislation.

If Parliament cannot or will not vote to approve the deal, Council President Donald Tusk said at a press conference at the end of the night, then the UK has only three options to avoid a disorderly Brexit on April 12.

How to Avoid No-Deal

“What this means in practice is that, until that date, all options will remain open. The cliff-edge date will be delayed. The UK government will still have a choice of a deal, no-deal, a long extension or revoking Article 50.”

EU diplomats were at pains to emphasize that this timeline envisions no further discussions on the EU side. Journalists will not be summoned to Brussels once again on April 11 for an emergency last-minute summit. All EU countries will finalize preparations for no deal and will be ready on April 12. This is it—Brexit is banished from the Council meeting room.

It remains unlikely that the UK would actively choose a no-deal Brexit should the deal fail next week, given the UK Parliament has already voted to rule out such an outcome. But it could still happen if they cannot come up with any other solution. And the EU27 have said they will not intervene if they see the UK accidentally stumbling toward the cliff edge. Whether they would actually stick to this threat is open for debate. Never say never to an emergency summit.

The UK government could, as Tusk mentioned, choose to avoid the cliff by revoking Article 50 and cancelling Brexit. The European Court of Justice has ruled that this can be done unilaterally and cannot be vetoed the EU27. This would not necessarily mean Brexit doesn’t happen—the UK could choose to trigger Article 50 again at a future date, once the government has a clearer idea of what it wants.

The other option is to ask for a long extension. EU leaders have said this would only be possible should circumstances materially change. This would most likely come in the form of a new general election and government change, or a second referendum.

In order to get this long-term extension, the UK must commit to holding an election to the European Parliament in the week of May 23—something Theresa May has said she cannot countenance doing as prime minister. The concern is that if the UK is still a member when the new European Parliament takes its seats on July 2, and Britain hasn’t run elections in May, it would mean that this EU Parliament is illegally constituted. This would leave both the European Parliament and the Commission open to legal challenges.

However, even if the UK commits to run the European Parliament election and plans a new national election, the EU27 could still reject a long-term extension. French President Emmanuel Macron has said he is opposed to a long-term extension in almost all circumstances. He does not want a situation where the UK continues to be inside the EU and voting while it still intends to leave.

However Macron could be convinced to soften his stance if the UK commits to abstain from voting in the EU unless and until it decides to remain.

What’s Next?

Eager to be rid of the Brexit mess, the EU27 leaders were at pains last night to stress that the ball is now in London’s court. John Bercow, the speaker of the House of Commons, must first decide if he will allow Theresa May to bring back the same deal for a third vote.

Should the vote go ahead, Theresa May will have to convince more MPs to approve her deal. Given how much she alienated MPs in her televised address to the public on Wednesday night, this seems unlikely. Indeed, her attacks on the Parliament as thwarting the will of the people so incensed some members of her own Conservative Party that they have said they would vote against her deal on the third try, even though they had supported it on the second try.

It is quite possible that Theresa May would respond to a third rejection by calling a general election—or could be forced to do so by a no-confidence vote triggered by opposition leader Jeremy Corbyn. Such an election would obviously take longer than two weeks to organize, and so the UK would say this is enough reason to grant a long-term extension.

It is possible, some have theorized, that the general election could happen on the same day as the European Parliament election—maximizing turnout and providing a clearer gage of whether the public wants a second referendum to overturn the first one.

The other option, calling a second referendum without a new general election, remains a distinct possibility. The Labour Party officially supports it, even though everyone knows that party leader Corbyn secretly opposes it. Parliament rejected the idea of a second referendum last week in a procedural vote, but that is assumed to have failed because MPs who support the so-called “People’s Vote” thought it was not the right time to ask for one. It does not mean that Parliament has definitively ruled it out.

How things play out in the coming week may depend on what kind of turnout a “People’s Vote March” attracts in the UK this weekend. If the turnout is lackluster, MPs may not be convinced that there is the public will for anything but a no-deal Brexit. If the turnout is equal or greater to the last march, they may well be convinced.

The post A Reprieve from Disaster appeared first on Berlin Policy Journal - Blog.

© REUTERS TV via REUTERS

Who is writing the script for Brexit? Because this drama seems to have no end in sight. No sooner had we journalists written our pieces about what to expect this week than we had to consign them to the bin. The story moved from when would British Prime Minister Theresa May bring her twice rejected Brexit deal back to Parliament to wondering whether she could legally bring it back at all.

The latest twist in this never-ending saga centers around the Speaker of the House of Commons, John Bercow. He is in effect the chief official in Parliament and therefore oversees procedure. He also has a habit of causing political upset to one side of the House or the other. His latest ruling can only be described as a bombshell and draws on parliamentary convention dating back to 1604.

Unless the proposition for passing May’s twice-defeated Withdrawal Agreement is “substantially” changed, Bercow has said she cannot present it again to Parliament. So, all the talk about whether she may finally have won over the hardcore Brexiteers in her own party or even those awkward 10 Northern Irish DUP MPs who prop up her government in Westminster, appears to be irrelevant. No-one really knows what happens next. The United Kingdom may not have a written constitution, but there’s talk that it’s now in constitutional crisis.

On Thursday and Friday there’s another EU Summit of the leaders of the member states. Originally it was supposed to be a rubber-stamping exercise, a few days before the UK officially leaves the EU. Since last week we’ve known that Theresa May would be forced to ask for a delay to Brexit. That delay now looks endless as she and her team try to work out what on earth they do next.

Major Headache for Brussels

In Parliament, John Bercow suggested a complete renegotiation at EU level would be needed in order to justify the government’s Brexit deal again being presented to Parliament. It had been assumed that clarifying the legal advice on the so-called Irish backstop would be enough to warrant another vote on May’s Withdrawal Agreement. Many Brexiteers are delighted with the Speaker’s latest ruling, believing that yet again a no-deal Brexit must be back on the table—even if Parliament ruled it out last week. Remember, until there’s a change in British law, the UK is still due to leave the EU next Friday.

All of this creates a major headache for Brussels. EU chiefs don’t want to see a chaotic, no-deal Brexit. But neither do they want to consider a complete renegotiation with London. They’ve always maintained that the Withdrawal Agreement cannot be reopened. They’ve also made it very clear that extending Article 50 of the Lisbon Treaty for no clear purpose is not something they can support. So, what will they do now? How can they maintain a united front for all 27 EU members when no one is quite sure what it is they are actually uniting around?

An Opening for a Softer Brexit?

Another significant problem is that a delay to Brexit of anything more than a couple of months will mean the UK is forced to take part in the European Elections which will be held in May. Those who see themselves as defending the EU project will not want a pro-Brexit populist party, probably fronted by Euroskeptic MEP, Nigel Farage, trying to hijack an election that’s already looking difficult to stage manage. None of this was part of the script.

There have been suggestions that the current Parliamentary session in Westminster could be cut short. But that would surely lead to another British general election. Perhaps instead, focus will now turn to the short document that accompanies the Withdrawal Agreement—namely the Political Declaration. This focuses on what type of future relationship the UK and EU will have post Brexit. Could a majority in Parliament agree to a softer Brexit—one that, say, keeps the UK in a Customs Union and perhaps even the Single Market. The very idea will be hated by Euroskeptics, but there are many MPs across the House of Commons who would prefer this to a hard Brexit.

Waiting for the Brexit Finale

No-one can really predict what happens next. Which reminds me of something that happened last Thursday night. Just after a majority of British lawmakers had voted to delay Brexit, I was at Berlin’s Mercedez Benz Arena watching one of my favorite bands play. The members of Florence and the Machine are proud South Londoners. But it quickly became apparent that they, like other British artists who find themselves touring Europe, are acutely embarrassed about what’s going on back home.

In front of more than 17,000 people, singer-song writer, Florence Welch, summed up the state of Brexit in three words. “It’s a mess!” she declared, before asking us all to hold hands to show that we were all united. As a Brit it was rather touching—if a little uncomfortable. But it just goes to show how much Brexit is dominating not just British life, but European life too.

At some point, this excruciating British drama will have to reach its climax. Despite all the extraordinary twists and turns, there’s still some way to go before we reach the finale.

The post Bercow Bombshell Creates Even More Brexit Drama appeared first on Berlin Policy Journal - Blog.

Parliament TV handout via © REUTERS

This is it, the Brexit endgame. At least, that’s how British Prime Minister Theresa May is portraying it to a nervous nation.

On Tuesday March 12, members of the British Parliament will take what May promises is the final vote on the Withdrawal Agreement she negotiated over two years with the European Union. The deal has already been rejected twice, first in a vote cancelled at the last minute in December, and then again in a vote in January that saw the largest rejection of a sitting government in modern British history.

The Withdrawal Agreement was defeated by strange bedfellows: a mixture of Remainer MPs opposed to Brexit entirely and Leaver MPs opposed to the agreement’s backstop arrangement for Northern Ireland. The deal stipulates that if the UK and EU can’t agree a free trade arrangement that would prevent a hard border on the island of Ireland, the UK will automatically—and involuntarily—be put into a customs union with the EU until a solution can be found.

For the EU27, all that can be done is sit and wait to see what the week brings. Agreeing to May’s 11^th hour dash to Strasbourg on Monday evening and to what the prime minister said were “legally binding assurances” regarding the backstop was the utmost the EU could do to help. “There will be no further interpretation of the interpretation,” Commission president Jean-Claude Juncker warned.

Tuesday

But will the additional assurances be enough to get May’s deal over the line? Tuesday afternoon will see the UK parliament vote once again on it. Labour leader Jeremy Corbyn has called upon the House of Commons to reject the exit agreement, and a rough survey of MPs’ positions shows it is still unlikely to pass—but never underestimate the power of last-minute panic.

If May’s deal does actually pass, Brussels and London will immediately start negotiations on a future free trade deal. The UK will officially leave the EU on March 29, but everything on the ground will remain the same at first.

That’s because May’s deal has provided for a two-year transition period during which EU rules continue to apply to the UK while the future relationship is hammered out. During this time the UK will be a rule-taker, having to follow EU laws and pay into the budget while having no vote in the EU’s institutions. British representatives will immediately leave the European Parliament, European Council, and European Commission.

Wednesday

However, if MPs reject May’s deal again, it will be indisputably dead. She has even conceded this herself. And that would mean that there would be no deal in place by the March 29 deadline, resulting in a disorderly Brexit which, under the most alarming projections by economists, could throw the entire world into economic chaos. At the very least, it will throw the UK into chaos in April.

To avoid this, May has agreed to a vote on Wednesday on whether or not to rule out no-deal Brexit as a possibility. May has said she is opposed to no-deal Brexit, but ruling it out would destroy the UK’s leverage at these pivotal last moments. The UK would no longer have a bomb to strap to its chest in the closing days before March 29—a bomb which would chiefly injure itself, but also its European neighbors.

It is unclear whether a vote to rule out no-deal can pass. There are many hardcore Brexiteer MPs who actually want a no-deal Brexit, saying that the economic chaos will be worth it for the sovereignty won, and that in any event the predictions are exaggerated. Dominic Raab, May’s former Brexit Secretary, has even called for May to whip her party to vote for a no-deal Brexit.

If the UK Parliament rejects the motion to rule out no-deal, then we are heading for a disorderly Brexit in two weeks’ time. Many expect that after such a result, the pound would enter a free fall on Thursday and global financial markets will wobble at best, panic at worst.

Thursday

If Parliament votes to rule out no-deal, then May will table a motion the following day to ask for a short extension of Article 50, moving the Brexit deadline from the end of March to the end of June.

The ball then moves to Brussels’ court. Under normal circumstances it might seem reasonable that the 27 other EU countries would agree to such a request in order to avoid catastrophe. However, the situation is complicated by the European Parliament elections taking place in May.

Right now, the UK is not planning to run a vote to elect MEPs for the next European Parliament term starting in July because it expected to be out of the EU by the time of this election. That’s fine if the UK really does leave by end June. But EU diplomats are skeptical. After all, what can be achieved in three months that couldn’t be achieved in two years?

The EU27 are going to want assurances from May that she sees some way to move the needle by then. Because if she were to ask for another extension, it would mean the UK is still in the EU when the new European Parliament takes its seats on July 2. If the UK hasn’t run elections in May and does not seat new MEPs, it would mean the new European Parliament is illegally constituted. Any laws it passes could be challenged in court. Obviously, the EU sees this as an unacceptable risk.

That’s why many EU leaders, including in Germany and France, as well as the EU Commission according to reports, believe that the EU should insist on a two-year extension and force the UK to run a European Parliament election in May. However other EU leaders, notably the European Parliament’s chief Brexit negotiator Guy Verhofstadt, are opposed to this idea. They believe this would continue the Brexit limbo indefinitely. Better to rip off the band aid now and get it over with.

On the UK side, May’s government has said it would be politically impossible to ask citizens to vote in a European Parliament election when they voted to leave the EU three years ago. It could prove very hard to get approval for a two-year extension in London.

However, with Labour leader Jeremy Corbyn now ostensibly supporting a second referendum on leaving the EU, such an outcome is more likely. A second referendum would take six months to organize. If there is still a possibility that the UK is staying in the EU, it is logical that it should take part in this year’s European election. Indeed, the outcome of that election in May would be a barometer for whether a second referendum is likely to result in a changed outcome.

If the week ends with a rejection of May’s deal, a rejection of no-deal, and an approval of a time extension, it will fall to May to convince her EU counterparts that she can find a solution within three months. She may travel to Brussels as soon as Friday to do so.

Given the political situation in the UK, it’s hard to see how she can be terribly convincing. In fact, if the votes unfold as many predict, she may be unable to survive as prime minister until the end of the week.

Sharpening the Knives

According to the Sunday Times, her rivals within the Conservative Party are already sharpening their knives. “Allies of the four main contenders to succeed her—Boris Johnson, Sajid Javid, Jeremy Hunt, and Dominic Raab—said they were ‘ready to go’ and that ‘things could move quickly,’” the newspaper reported.

It may be that these Conservative rivals believe the threat of no-deal Brexit will scare Brussels into a last-minute accommodation in the days or hours before March 29, as often occurred during the Greek debt crisis.

But in this they are likely mistaken. In the rest of Europe there is an awareness that any no-deal chaos will not stop at British shores. But many, boiling with frustration over Britain’s behavior, have come to believe it is the only realistic outcome of this drama. Better to get the pain over with now then let it drag on for years and years.

In any event, some say, the timing just before the European Parliament elections could prove to be an effective weapon in blunting the appeal of anti-EU populists throughout Europe. If European voters see Brexit Britain embroiled in economic chaos, it could convince them that voting for parties that would take them down the same path is not a good idea.

Brussels has much less reason to blink than London in the closing hours of this drama.

NB. This article was updated on March 12 to include May’s late visit to Strasbourg the previous night.

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© REUTERS/ Toby Melville

If you were to describe Brexit as a farce, you wouldn’t have to look much further than the latest debacle to hit the British government. £33 million is the sum the Department for Transport has been forced to pay Eurotunnel to settle a legal case over “secretive” ferry contracts. The scramble to secure extra ferry capacity came about because of fears that a no-deal Brexit could affect the supply of medicines. One of those multi-million pound contracts was awarded to a company that had—wait for it—no ships at all. That contract with Seaborne Freight was eventually withdrawn.

These stories, along with the political crisis engulfing Westminster, sum up the state of play in Brexit Britain. Yet the country has somehow to get its act together if it really is to leave the European Union on Friday, March 29 with some kind of agreement.

For this to be even remotely possible, Prime Minister Theresa May still has to get her deal through Parliament. Having lost a vote on her Brexit deal back in January by an historic margin (she was beaten by a majority of 230 votes), May has been doing all she can to run down the clock. This is to force British MPs to accept her deal or face a chaotic Brexit.

Brexit Delayed?

But thanks to resignation threats from several government ministers who oppose a no-deal Brexit, Theresa May has had to offer something she really didn’t want to—a possible delay to Brexit. It looks as though she will present her latest deal to Parliament next Tuesday, March 12. If it’s again defeated, MPs will vote the following day on whether they would accept a no-deal Brexit. When that’s defeated (which it surely will be because a majority of MPs do not support leaving the EU without an agreement), they will be asked on the Thursday whether the government should seek an extension to Article 50 of the Lisbon Treaty. If that result is yes and if the EU agrees, Brexit will be delayed. For how long will become the next battle.

The Labour Party, the main opposition, has also been forced to change its position. After months of procrastination its euroskeptic leader, Jeremy Corbyn, is grudgingly backing a second referendum, though it’s not clear exactly what would be on the ballot. This turnaround is in part down to the decision by eight of his own MPs, all of whom support a “People’s Vote,” to jump ship and form a breakaway formation, The Independent Group. As soon as the referendum pledge was confirmed, one of those MPs told me, “With Corbyn, always read the small print: terms and conditions most probably apply.”

Those eight Labour MPs have since been joined by three Conservatives, making Theresa May’s minority government a little smaller. In fact, even though The Independent Group isn’t yet a political party, one recent poll had it on 18 percent. Over these hectic past few weeks, Brexit has been changing the political dynamic in Westminster even more dramatically than usual.

May’s Chances Rising

But before you start to think a delay to Brexit and a second referendum are all but inevitable, think again. While nobody can predict with any certainty what the final outcome will be, there is an increasing chance that Theresa May could yet get her revised Withdrawal Agreement through Parliament. Why? Because the threat of a delay to Brexit, coupled with Labour’s move toward backing some kind of referendum, may well focus minds.

Some of the hard Brexiteer Tories in the European Research Group, including its leader Jacob Rees-Mogg, seem to be softening their resistance to May’s deal. Their main source of contention is over the so-called Irish backstop—an insurance policy included in the agreement to avoid a hard border between Northern Ireland and the Republic of Ireland. Pro-Brexit MPs hate it because it could place the whole of the UK in a Customs Union with the EU, while also forcing Northern Ireland to abide by stricter rules.

They want legally binding changes to the text that would either remove the backstop or at least give it a time limit. So far, Brussels has refused to reopen the agreement. But there is talk among Brexiteers—including those 10 Northern Irish DUP MPs who prop up May’s government—that they would consider accepting another form of mechanism to ensure the backstop is temporary.

But even if the government’s chief legal adviser, Geoffrey Cox, can persuade Brussels to add a codicil or appendix to the agreement, what could it possibly say that would keep all sides happy? Nobody there wants to threaten the Good Friday Agreement that brought peace to Northern Ireland more than 20 years ago. And Brussels’ allegiance must lie with Dublin, not London.

Despite the Brexiteers’ warmer words, the British prime minister must surely know by now that she can’t rely on them. Some would be quite happy to leave the EU with no deal in place. So in the time that’s left, May will continue to reach out to the more moderate members of her party, as well as those Labour MPs who support Brexit or at least feel they must honor the 2016 referendum result.

Corbyn’s Calculations

Jeremy Corbyn could probably live with some of his Labour MPs backing the deal. For him, that would at least reduce the likelihood of a second referendum, which he has been forced to back reluctantly. There is still a possibility that the party could support May’s deal, or at least abstain, allowing it to pass in exchange for a new referendum that would include the option to remain. But helping May get her deal through would not be the euroskeptic leader’s preferred option: if Labour’s top command can ensure the Brexit mess is laid at the door of a right-wing Tory government, so much the better.

There’s also talk of the PM offering Parliament two “meaningful” votes this month on her agreement with Brussels, in order to get her deal over the line by March 29. But time is running out, and even if May does get it through, the British Parliament will still need to put the necessary legislation in place before B-Day.

Each day lost to indecision and political paralysis makes a delay to Brexit ever more likely. Former British Ambassador to the EU Sir Ivan Rogers recently told Der Spiegel that he has been surprised at “the extent of the mess.” Few can disagree with that.

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© REUTERS/Toby Melville

How strange: when the British parliament on January 15 voted down the Withdrawal Agreement that would have set a stable framework for Britain’s exit from the European Union, financial markets actually approved. The pound rose against the euro and the dollar, and so did the British stock market. Both then remained stable for the rest of the week.

Financial markets decided to take away one message–and one message only–from Prime Minister Theresa May’s crushing defeat: that a hard Brexit is now less likely. They believe there could be a second referendum which would reverse the decision taken in 2016. And even if there was going to be a Brexit, it would be a much softer one, giving Britain the same kind of close association with the EU that Norway enjoys.

Mark Carney, the governor of the Bank of England, confirmed that markets expect Brexit to be delayed. Note his careful wording–“Public market commentary, consistent with our market intelligence, is that a rebound appears to reflect some expectation that the process of resolution would be extended and that the prospect of no deal may have been diminished.” The highly respected central bank chief avoided any indication of whether he shares those market views or not.

Wishful Thinking

Indeed, the optimism demonstrated by traders and investors may prove only one thing: politicians may not be the only people prone to wishful thinking. In truth, the parliament’s vote only means that the middle road–Brexit on the basis of an orderly withdrawal agreement–has become more unlikely. Remaining in the EU has become a stronger possibility, but so has the least desirable outcome of all, a so-called “hard Brexit” where Britain crashes of the EU without an agreement.

Politicians in Berlin, Paris, or Brussels don’t share the markets’ optimism. In all three cities, fear and frustration are running high. There is little confidence that the UK’s government and parliament will be able to win sufficient support for a viable solution in the very short time before March 29, when Brexit will come into effect.

If all EU countries agree, an extension of a few weeks may be possible. A breakthrough in negotiations is unlikely, but governments would gain time to put emergency measures in place. A longer delay would create considerable constitutional difficulties as it would mean that British voters would need to take part in the European Parliament elections set for May 26-28.

Being Prepared

Since 2017, the European Commission has worked intensively on legal provisions to safeguard EU citizens and companies if the UK leaves without a withdrawal agreement. More than 80 detailed “Brexit Preparedness Notes” have been published covering everything from environmental issues to data protection and trade.

In their complexity and comprehensiveness, the notes make for chilling reading. A crash-out Brexit carries enormous costs and risks.

The most immediate fears concern the financial markets. As the UK reverts to the status of a third country, its banks and institutions lose the “EU passports” that have allowed them to offer their services across Europe’s single market. To avoid a crash, the Commission suggests allowing the central clearing of derivatives and the central depositories services to continue for another 12 to 24 months.

Will that be enough? The Commission thinks so, and Guntram Wolff, director of the Brussels-based think tank Bruegel, agreed when he testified before the Bundestag on January 10. “When it comes to financial services, we consider that the most important contingency plans have been made,” Wolff said. Yet the proof will be in the pudding.

Temporary Exceptions

As soon as Brexit comes into force without a Withdrawal Agreement, other licenses issued by British authorities on behalf of the EU will lose also their validity. This will concern all kinds of goods and services, from chemicals and vehicles to insurance contracts. Even with some ad-hoc transition arrangements, the costs and bureaucratic difficulties involved in issuing new licenses are likely to be huge.

UK road hauliers will be given a temporary exception from some of the restrictions that the EU would normally apply to a third country, one of the Commission notes suggests. Otherwise, physical trade would come to a standstill. That may happen anyway. How on earth is the port of Dover supposed to cope with 10,000 trucks every day if each one of them needs to complete paperwork as well as undergo physical checks?

UK-based airlines will be given temporary permits to fly over EU territory, refuel there, and transport passenger and freight between EU and British airports. But they will not be allowed to transport passengers between two EU destinations or from the EU member state to a third country. As a consequence, some airlines have already shifted part of their operations to the continent to avoid bans.

Lots more sectors will be hit in lots more ways, making business and trade more difficult and more expensive. The EU’s contingency measures, the Commission has said, “are unilateral measures for damage limitation and can only mitigate the most severe consequences of a withdrawal without an agreement.” But even they, Bruegel’s director Wolff warned, still need to be passed into law by the Council and the European Parliament.

National governments are also under pressure to get their contingency measures for Britain crashing out in place. Otherwise, UK citizens in the EU risk losing their legal status overnight and may be unable to access health insurance or unemployment benefits.

Laws to avoid such an outcome are being processed nearly everywhere in Europa, but many of them still need to be passed by the national parliaments. “We want to keep the damage–and there will be damage in any case–as small as possible,” German Chancellor Angela Merkel said.

It’s Nice to Be a British MEP

There is only one group of people, it appears, who truly do not have anything to fear from Brexit. British members of the European Parliament, POLITICO reported earlier this month, can be certain to receive a generous transitional allowance from the instant that Britain leaves the EU.

British MEPs will have to vacate their offices in Strasbourg and Brussels before Brexit day on March 29, but in addition to getting their trip home paid for, they will receive €8,611.31 per month for up to two years. Ironically, some of Britain’s fiercest Brexiteers and anti-Europeans will be entitled to particularly large sums of money because they have served in the parliament for a long time. Nigel Farage, POLITICO reported, stands to receive up to €172,000.

A soft landing for him, either way.

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© REUTERS/Henry Nicholls

Though it was widely expected, Tuesday night’s resounding rejection of British Prime Minister Theresa May’s Brexit deal by the British parliament still managed to send shock waves throughout Europe. The overwhelming margin of the no verdict, by 432 votes to 202, showed that the exit agreement painstakingly negotiated over the past two years has no chance of passage.

May triggered Article 50, the two-year process of leaving the EU, on March 29, 2017. Under the terms of her withdrawal deal, the UK was set to enter into a transition period on Brexit day this year, which would keep everything the same for a further two years while London and Brussels negotiate its future relationship. But no withdrawal agreement deal means no transition period, and the UK will very suddenly find itself completely outside the EU on March 29 with neither side having anything close to adequate preparations for the economic chaos that would result.

The deal was defeated by a combination of opposition parties and hard-line members of May’s own Conservative Party, who don’t like the deal’s “backstop” provisions that could keep the UK involuntarily in a customs union with the EU in the future. The prime minister has spent the rest of this week consulting with opposition party leaders to see what it would take for them to support her deal. However, Labour’s Jeremy Corbyn, the leader of the largest opposition party, has refused to meet with her unless she can guarantee she will never allow a no-deal Brexit to happen.

Two Options

With the EU ruling out reopening the withdrawal agreement under May’s existing conditions, it is clear that she must adjust her red lines in order to get approval from opposition parties. The red line most in need of adjustment is her insistence that the UK will not be in a permanent customs union with the EU after Brexit.

May’s insistence on this red line is what necessitated the Northern Ireland backstop in her withdrawal deal¾the element that has been unpalatable to hard-line Brexiteers in her own party. No customs union would mean that a hard border needs to be set up on the island of Ireland in order to check goods between the UK and the Republic of Ireland, something Dublin, supported by its EU partners, says would be unacceptable, as it would violate the Good Friday agreement of 1998 that brought peace to the province after decades of sectarian violence. The backstop would automatically put the UK into a customs union with the EU after the two-year transition period ends if no free trade agreement has been reached by then, in order to avoid a hard border being necessary.

If Theresa May were to agree to a permanent customs union now, it would be the kind of “soft Brexit” that may be acceptable to members of the Labour, Liberal Democrat, and Scottish Nationalists (SNP) parties.

However, hard-line Brexiteers will resist such a move because it would almost certainly mean that the UK cannot strike independent free trade deals with third countries like the United States, which was one of the main reasons the Brexiteers put forward for leaving the EU in the first place.

May’s other option for avoiding the cliff edge in 70 days is to request an extension of Article 50. Before the new year, EU countries had voiced skepticism about whether they would approve such a request, saying that May would need to give a good reason. They don’t, after all, want to just extend the current paralysis into perpetuity. But since Tuesday’s vote, and the increasing panic setting in across European capitals, it now seems clear that such a request would be granted.

More Complications

Extending Article 50 comes with its own set of complications however. Even an extension of a few months would take the leave date past the date of the next European elections and the start of the new European Parliament. The UK would be legally obliged to run a vote to elect British members of the European Parliament in May, and those elected would need to take their seats in July—perhaps to only serve a term of a few weeks.

The bigger problem is that extending Article 50 does not solve anything on its own. Something needs to change during that extended time, and May’s EU partners will be looking for her to give reassurances that the dynamics can change. One thing that would change the situation is a second referendum to decide whether it’s to be May’s deal, no deal, or remaining in the EU. Another might be a general election, though it’s hard to see how having Jeremy Corbyn as prime minister would solve the impasse.

In the meantime, Brussels waits with baited breath for May to decide her next move. After weekend consultations, that move may come on Monday. But with time running out, the mood is growing increasingly anxious.

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© REUTERS/Yves Herman

“A Brexit Christmas wish: finally decide what you really want, and Santa will deliver”. These were the musings of Lithuanian President Dalia Grybauskaité on Thursday night as she prepared to hear Theresa May’s request to the European Union to offer her a legally binding guarantee on the notorious “Brexit backstop.”

But by all accounts, the British Prime Minister couldn’t decide what she really wanted. And even if she did, Santa was not willing to deliver.

As May tried to explain to the EU-27 leaders at the Brussels summit what it is she needs in order to get the Brexit deal she agreed with them last month through her parliament, German Chancellor Angela Merkel reportedly interrupted her multiple times and asked, “But what is it you want?”

No Clear Answer

According to what EU leaders said after the discussion, she never gave a clear answer. She repeated her request that the backstop have a legally binding end date, and they repeated their insistence that it is not possible to reopen the deal. They asked her if she had any other ideas, and she had none. The only response she could muster was apparently “Brexit means Brexit”.

It would be an understatement to say patience with the UK is wearing thin in Brussels. This week’s summit was supposed to be about other things—the EU’s budget, sanctions against Russia, and migration. Instead, European Council President Donald Tusk was forced to add Brexit to the agenda after May dramatically cancelled a planned parliamentary vote on her Withdrawal Agreement on Tuesday, insisting she needed to reopen it in order to get it through her parliament.

By Wednesday it was unclear whether May would even be the one coming to the Brussels summit, because her own party had tabled a no-confidence vote against her. She survived that vote, but only by promising her party’s hardline Brexiteers that she could get a legally binding guarantee on the backstop from the EU.

What is the Backstop?

May had to know that was a promise she couldn’t keep. The backstop is an insurance policy in case the EU and United Kingdom are unable to agree on a new relationship within the two-year transition period lasting to December 2020.

Its purpose is to prevent the sudden imposition of a hard border between the Republic of Ireland and Northern Ireland if a free trade deal hasn’t been agreed by that time. It would put all of the UK in a customs union with the EU, thereby eliminating the need for customs checks at the Irish border or in the Irish Sea. An open border on the island of Ireland is a condition of the 1998 Good Friday Agreement signed by Ireland, the UK, and the EU.

So as to give a guarantee that border checks will not be erected, the backstop can only be cancelled if both the EU and UK agree to do so, presumably because they have agreed a free trade deal that eliminated the need for Irish border checks.

But hardline Brexiteer MPs within Theresa May’s Conservative Party have cried foul. They suspect this is a ruse by the EU to keep the UK perpetually in “slavery,” as Conservative MP Jacob Rees-Mogg and arch-Brexiteer put it. As long as the UK is in a customs union with the EU, it cannot strike free trade deals with former colonies like the United States or India—which was supposedly one of the main purposes of Brexit.

Bracing for Impact

So what’s next? The mood in Brussels on Friday was that we are now careening toward a no-deal Brexit. EU Commission President Jean-Claude Juncker said after May’s request was rejected (he maintains there was no clear request in any event) that the Commission will next week publish its detailed plans for a no-deal Brexit. The 27 remaining EU countries will also move full steam ahead with adopting national laws in preparation. France already has no-deal Brexit legislation workings its way through its Assemblée Nationale.

The feeling now is this: if the EU is unable to give May what she says is necessary to get her deal through the British Parliament, then we are heading toward a no-deal Brexit unless a second referendum is called in the UK. We are just three months away from the deadline by which the UK must leave the EU, and behind the scenes diplomats are saying the only conceivable circumstance in which that deadline will be extended is a second referendum.

It’s all conjecture at this point since no discussion on the subject will take place until the UK asks for it, but most diplomats seem to think the EU-27 would not extend Article 50 for a UK general election.

It’s important to remember that in the event of no-deal Brexit, the two-year transition period previously agreed does not take effect. It means the UK crashes out of the EU on March 29 with no trading relationships other than through the World Trade Organization.

A Game of Chicken

It would also, many are pointing out, leave the Irish border in the exact place that the EU has been insisting must be avoided at all costs. No deal would mean customs checks must immediately be erected at the Irish border on March 29, risking a revival of violence in Northern Ireland.

That is a scenario nobody wants to see, and so we may end up with a game of chicken in February, with Brussels and London seeing who will blink first in order to avoid this disaster scenario.

Given that the chaos of a no-deal effects the UK far more than it does the EU-27, logically it seems like the first blinker should be the UK. But these are not logical times.

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© REUTERS/Annegret Hilse

British Prime Minister Theresa May, fresh from surviving a no-confidence vote called by disgruntled members of her Tory party, left for Brussels on Thursday morning to seek assurances that the UK will not be trapped in the “backstop” her government agreed to in November.

But she’s not likely to come back to Westminster with much in hand. EU leaders such as Council President Donald Tusk made clear earlier this week that, while the EU could offer Britain some (legally non-binding) assurances that the backstop is not the desired long-term outcome, there is no room whatsoever for renegotiating the agreed legal text.

The EU’s biggest member-state is now hammering that point home.

Germany’s Foreign Minister Heiko Maas said he was relieved to see Theresa May survive the no-confidence vote within her party. But he sees no room for reopening negotiations on the already agreed divorce deal, in particular on the Irish backstop.

Those sentiments were backed by the chairman of the foreign policy committee in the Bundestag, Norbert Röttgen of the CDU, who said that EU negotiators had already worked for months on the current deal and that “all possibilities have been exhausted. There’s nothing left.” And a few hours later, the German Bundestag passed a motion asserting that the Brexit divorce deal could not be revisited.

(Merkel herself already told her CDU colleagues on Tuesday that she opposes renegotiations.)

The central sticking point for Theresa May and her government is the backstop, a safety-net provision meant to prevent the return of a hard border in Ireland: if no UK-EU trade deal has been agreed by the end of the transition period in December 2020, the backstop will keep Northern Ireland in parts of the single market and the whole of the UK in the EU customs union. This is anathema to both unionists in Northern Ireland, who don’t want the region to be treated differently from the rest of the UK, and euroskeptic MPs, who fear the backstop will leave Britain indefinitely subject to EU rules and unable to sign new trade deals.

Neither side can dissolve the backstop unilaterally, but only the EU would be comfortable letting trade talks drag on while the UK remained indefinitely bound by rules in which it had no say. So May is looking for a legally binding commitment from the EU that the backstop is temporary. And she is particularly keen to do so because the DUP, Northern Ireland’s unionist party, is propping up her shaky government and has threatened to pull out of the coalition if its concerns are not addressed.

As May seems incapable of getting her deal through the British parliament, there seems to be a growing consensus in Berlin that only two viable options remain: a no-deal, hard Brexit, which all sides are keen to avoid, or a second referendum.

And Norbert Röttgen has voiced his support for the latter, saying in a post on his Facebook page:

“The no-confidence vote didn’t change anything much. There is still no majority in parliament for the Brexit deal. Therefore, the only logical way out of the chaos that I can see is a second referendum on the future of Great Britain.”

The EU will continue to discuss Brexit at a summit in Brussels. But the ball is in Britain’s court.

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© REUTERS/Piroschka Van De Wouw

Last Friday, another government minister resigned—the seventh since the Brexit deal agreed with Brussels was published last month. More than 100 MPs from British Prime Minister Theresa May’s own party have already said they will vote against the EU Withdrawal Agreement when it’s put to Parliament next Tuesday. Labour, the official opposition, has said it will also vote against the deal, as will the Scottish Nationalists (SNP) and other smaller parties. Even those 10 MPs from Northern Ireland’s Democratic Unionist Party (DUP) who prop up May’s minority government have also vowed not to support her.

In fact, there are some who believe that Downing Street will decide that success for May in next Tuesday’s vote is so implausible that they will scrap it altogether. As one leading Brexiteer told me, somewhat cynically: “That’s what they do in the EU Council of Ministers, so why not in Westminster?”

Yet against all odds, it looks like Theresa May and her loyal team of MPs and advisers are pressing on with the vote. They apparently believe that they can turn it around. There is the usual arm-twisting going on by government “whips,” whose role it is to ensure party discipline. The prime minister herself is holding one-to-one talks with MPs who might be persuaded to support her.

It’s not an easy job, but it must have helped that lead Brexiteer, Michael Gove, who has stayed in May’s cabinet as environment secretary, has publicly warned that voting down her deal could lead to a second referendum and possibly no Brexit at all. He believes that it’s more important to get the United Kingdom out of the EU as soon as possible than to worry too much about details now. Many call this a “Blind Brexit,” but for the likes of Gove it’s simple politics. All May needs is a one vote majority on December 11 in Parliament and she’s pretty much sealed her deal.

But let’s assume that next Tuesday evening  May fails. What then? There are various scenarios that could play out and much would depend on how heavy the defeat is:

Second Parliamentary Vote

The smaller the rebellion, the more likely May is to ask that Parliament be given a chance to vote again. Some believe that this has always been Downing Street’s plan—let MPs experience the chaos their “no” vote unleashes, particularly in financial markets, and then be given the opportunity to try again.

Ask for More EU Concessions

The prime minister may decide to head straight back to Brussels to try to eke out more concessions from the EU, particularly over the deeply unpopular Northern Ireland “backstop.” It’s unclear, though, what more the EU would be prepared to give. Spain’s concerns over the future of Gibraltar post-Brexit have proven that it’s not all about what the UK wants.

Calls for a Softer Brexit: “Norway Plus”

A “no” vote could also see May come under more pressure from a cross-party coalition of MPs who are demanding a softer Brexit—the so-called Norway Plus. Essentially this would keep the UK in both the customs union and the single market, for a limited amount of time at least. But with the single market comes freedom of movement. Given that it was the issue of immigration that prompted many in the UK to vote to leave the EU in the first place, this could be deeply unpopular. As the name suggests, those in favor of “Norway Plus” want extra concessions from the EU, and there will be member states who will feel the UK has already been offered enough.

May Resigns

May could of course quit—either by choice or due to pressure from senior ministers. The hard-right Brexiteers within her party, who are led by the rather eccentric Jacob Rees-Mogg, could finally secure those 48 letters needed to push for a leadership contest. The question would then be: who would replace her? There would likely be outright civil war within the Tory party. And as I wrote before, the big risk is that neither side gets the leader they want.

Labour’s Motion of No Confidence

If May loses the Parliamentary vote next week, the Labour Party looks certain to force a no-confidence vote in the government. Of course, what the party really wants is a general election. But Labour would need a majority in Parliament, and there’s no guarantee that it would get one. Those Tory MPs who are either vehemently pro- or anti-Brexit are unlikely to risk a hard-left government led by Jeremy Corbyn.

May Calls a General Election

May herself could call a general election. She’s spent the last few weeks trying to win over the public, as seen during her tour of the country. But the 2017 general election didn’t go too well for her and this would be an even greater risk.

A Second Referendum

So could this be the moment when the so-called People’s Vote becomes a real possibility? One of those behind the campaign has admitted that to make this happen, the Labour Party would need to be on board. So far, however, the Labour front bench has given mixed messages. Party leader Jeremy Corbyn, himself a euroskeptic, has been unwilling so far to lend his support or even say which way he would vote if there were to be another referendum. Still, Shadow Chancellor John McDonnell said recently that a “People’s Vote” might become inevitable. The problem with a second referendum is that the UK is still divided over Brexit and there’s no guarantee that the result would be different to that of 2016.

***

Things are moving extremely fast over Brexit. On Tuesday night, the government lost three successive votes, including being found in contempt of Parliament–the first time in British history. This was over the government’s decision not to  publish its Brexit legal advice in full. It has now done so, opening up another can of worms over the so-called Irish backstop.

But it was the third vote that could be the most interesting. MPs backed a proposal that Parliament could help determine what happens if they reject May’s Brexit deal next week. Many see this as a way of ensuring a no-deal Brexit will be avoided. It’s being hailed as a victory for those politicians who either want a softer Brexit or none at all.

The only silver lining to all this for Theresa May is that it may convince rebellious Brexiteers that if they don’t back her deal next Tuesday, Brexit could be derailed all together. That, of course, is what many pro-Europeans are hoping for.

This article was updated on December 5 to reflect the British government losing three votes in parliament at the start of the debate.

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