After May asks for help, Germany’s Merkel says no more Brexit negotiations

BERLIN (Reuters) – German leader Angela Merkel ruled out further negotiations on Brexit on Tuesday but said efforts were being made to give Britain reassurances after Prime Minister Theresa May abruptly pulled a parliamentary vote at home because she faced defeat.

With less than four months left until the United Kingdom is due to leave the EU on March 29, May’s Brexit deal is floundering, opening up prospects that run the gamut from a disorderly no-deal divorce to calling Brexit off.

A day after pulling the vote in the face of ridicule from lawmakers, May rushed to The Hague for breakfast with Dutch Prime Minister Mark Rutte and then to Berlin to meet Chancellor Merkel before a trip to Brussels.

The message from the EU was clear: it will give assurances about how it will interpret the exit treaty, but will not countenance reopening the text itself.

In rainy Berlin, a hitch with May’s car door briefly trapped her inside, delaying her red carpet handshake with Merkel.

According to two sources, Merkel told her own German conservative parliamentary group on Tuesday that there would be no further negotiations on Brexit but efforts were being made to give Britain reassurances.

May had informed Merkel that the deal would have been voted down, and that it was in nobody’s interest for Britain to leave with no accord, the sources said.

“The deal we achieved is the best possible. It’s the only deal possible. There is no room whatsoever for renegotiation,” European Commission head Jean-Claude Juncker said in an address to the European Parliament in Strasbourg.

The British parliament will get its vote before Jan. 21, May’s spokeswoman said. If there is no satisfactory deal by then, parliament will still be given a debate on the issue.

The British pound, which has lost 25 cents against the U.S. dollar since the 2016 referendum, was down 0.5 percent at $1.2501, falling after a Sky news reporter said a vote of confidence in May’s leadership was about to be triggered.

IRISH BORDER

The most contentious issue has been the Irish “backstop”, an insurance policy that would keep Britain in a customs union with the EU in the absence of a better way to avoid border checks between British-ruled Northern Ireland and EU member Ireland.

May’s critics say it could leave Britain subject to EU rules indefinitely. Juncker said neither side intended for the backstop ever to take effect, but it had to be part of the deal just in case.

As investors and allies tried to work out the ultimate destination for the world’s fifth-largest economy, rebel lawmakers in May’s party said she had to go.

“If we can’t go forwards with her deal … then I’m afraid the only way to change the policy is to change the prime minister and I really think it’s her duty to go,” Brexit-supporting Conservative lawmaker Steve Baker said.

A confidence vote is triggered if 48 Conservatives write letters demanding one to the chairman of the party’s so-called 1922 committee, Graham Brady.
A Sky news reporter said some sources were confident that the 48 letters had been submitted but that Brady would not announce it while May was abroad. However, other senior political editors said the threshold had not been reached.

With little hope of substantial changes from the EU, the options open to Britain range from a chaotic Brexit with no deal to risking the wrath of pro-Brexit voters by calling the whole thing off.

Both May’s ruling Conservatives and the main opposition Labour Party have pledged to implement the results of the 2016 referendum in which British voters backed exiting the EU 52 percent to 48 percent.

But a rising number of backbench lawmakers, along with three of the four living former prime ministers, say the only way out of the impasse may be a new referendum with an option to stay. A European court ruled this week that Britain could abandon Brexit with no consequences up until the moment it finally leaves.

Former Prime Minister John Major said on Tuesday that Britain must revoke its divorce notice immediately.

“We need to revoke Article 50 with immediate effect. The clock, for the moment, must be stopped,” Major, who also faced a revolt inside the Conservative Party over Europe, said in a speech in Dublin.

“It’s clear we now need the most precious commodity of all: time. Time for serious and profound reflection by both parliament and people. There will be a way through the present morass, there always is.”

Reuters

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.