Deadlock in London keeps Brexit hanging in the balance

Britain’s exit from the European Union hung in the balance on Monday as Prime Minister Theresa May tried to coax the Labour Party into agreeing a divorce deal, two days before an emergency summit where she will try to delay the April 12 departure.

Brexit has already been delayed once but May is asking the EU for yet more time as she courts veteran socialist Jeremy Corbyn, whose Labour Party wants to keep Britain more closely tied to the EU after Brexit.

May heads to Berlin and Paris on Tuesday to meet Chancellor Angela Merkel and President Emmanuel Macron and will be phoning other leaders before setting out the case for another delay at Wednesday’s EU summit in Brussels.

Nearly three years after the United Kingdom shocked the world by voting by 52 percent to 48 to leave the EU, May warned that Brexit might never happen, but said that she would do everything possible to make sure that it did.

Labour’s Brexit point man, Keir Starmer, said May’s government had so far not changed its position on Brexit and so no way forward had been agreed.

“Both us and the government have approached this in the spirit of trying to find a way forward. We haven’t found that yet. We will continue to do that,” Starmer said.

“The ball is the government’s court,” he added. “We need to see what they come back with and, when they do, we will take a collective position on that.”

What Starmer termed exchanges of communication had taken place over the weekend and, while no talks were scheduled for Monday, he said things could develop. He said an agenda had been circulated that included the idea of a confirmatory referendum.

May’s spokeswoman said she hoped further formal talks could take place later on Monday, adding: “The PM wants us to be able to agree with the opposition as soon as possible.”

She said May wanted Britain to have an independent trading policy – something hard to reconcile with Labour’s demand for membership of a customs union – and that both sides would need to compromise.

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BREXIT DELAY?

The 2016 referendum revealed a United Kingdom divided over much more than EU membership, and has sparked impassioned debate about everything from secession and immigration to capitalism, empire and what it means to be British.

Yet, more than a week after Britain was originally supposed to have left the EU, nothing is resolved as the weakest leader in a generation battles to get a divorce deal ratified by a deadlocked parliament.

EU leaders, fatigued by the serpentine Brexit crisis, must decide on Wednesday whether to grant May, who has asked for a postponement until June 30, a further delay. The decision can be vetoed by any of the other 27 member states.

Without an extension, the United Kingdom is due to leave the EU at 2200 GMT on Friday, without a deal to cushion the economic shock.

While the EU is not expected to trigger such a potentially disorderly no-deal exit, diplomats said all options were on the table – from refusing a delay to granting May’s request or pushing for a longer postponement.

The EU’s chief Brexit negotiator, Michel Barnier, was on Monday meeting Prime Minister Leo Varadkar in Ireland, which depends heavily on Britain as both a market and a transit point and would be hit hardest by a no-deal Brexit.

But May is boxed in at home: Brexit-supporting lawmaker Mark Francois demanded she resign and called on the party to vote on forcing her out.

As the crisis grinds on, one survey suggested that voters wanted a strong leader willing to force through reform of a political system that has been found badly wanting by Brexit.

Research by the Hansard Society found that 54 percent of voters wanted a strong leader willing to break the rules, while 72 percent said the political system needed “quite a lot” or “a great deal” of improvement.

Reuters

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell