Will Brexit happen this month?

British Prime Minister Theresa May has been in talks with opposition Labour Party leader Jeremy Corbyn, to see if they can come up with a common approach to Brexit. She is also asking European leaders for another Brexit delay, until the end of June, but will they agree?

Background

On June 23rd, 2016, Britain narrowly voted to leave the European Union, stunning Europe and the world. The EU employs a set of policies for its 28-member states that aim to ensure the free movement of people, goods and trade among other services. Britain is deeply intertwined with the workings of the EU especially with regard to trade.

PM Theresa May’s leadership in the negotiations has been heavily criticised. She has been unable to form a consensus within the Parliament, or even her own party, for the course of Brexit. Her “directionless” leadership has not convinced most of her peers in Westminster and she was challenged by a no-confidence motion in early December 2018, which she narrowly won.

Despite her best efforts, the British parliament is not accepting the proposed Brexit agreement. Irrespective of whether they arrive at a deal or not, the UK was officially set to leave on March 29, 2019, which was then advanced to April 12, 2019.

Analysis

After May admitted last week that her own efforts had run aground, she began chatting with Corbyn to see if together they could devise a more popular version of Brexit — one that could get parliamentary approval. Both Labour and May’s Conservative Party are divided over leaving the EU. But the prime minister and the opposition leader have been batting around plans in which Britain might remain cosy with the EU after leaving.

In theory, if May and Corbyn strike a deal before midday on April 10, May could print out 27 copies for the other E.U. leaders and bring it down to Brussels for them to sign later in the day. Britain could be out of Europe with an orderly adieu by May 22.

“Theresa May is leaving no stone unturned to try and resolve Brexit,” British Foreign Secretary Jeremy Hunt said on his way into a meeting of E.U. foreign ministers on Monday. Other European leaders “want Brexit to be resolved as quickly as possible, so do we, so do the British people, so do MPs, and so we are doing absolutely everything we can to try and get a resolution to get Brexit over the line.” No one expects the speedy scenario to work out.

May and Corbyn have alternated between sniping and, apparently, discussing ideas in earnest. But there is little political motivation for Labour to extend a hand to the Conservatives at this point. And British politicians have shown little ability to work together on Brexit for the past three years. No reason to think they would start now.

This is the one that sets stockpilers’ hearts aflutter — and may keep global investors awake all week. The British pound would probably tank. Parts of France and southern Britain could turn into a parking lot while fully loaded trucks wait for customs officials to figure out what to do.

The loudest proponent of a hard-line stance toward Britain is French President Emmanuel Macron. He models himself after Charles de Gaulle, the French leader who delighted in provoking conflict with the British. De Gaulle twice vetoed Britain’s effort to join the precursor to the E.U. in 1963 and 1967. Macron could zap them on the way out.

Macron notes that European leaders told May last month that if she wanted a membership extension beyond April 12, she needed to present them with a concrete plan about how she will deliver Brexit. The E.U. has too many other problems to be continually strung along in a crisis of Britain’s making, Macron’s thinking goes. And since there is no concrete plan, there is no reason for an extension, French diplomats in Brussels have been arguing. Belgium and Spain seconded the notion last week, according to diplomats familiar with the discussions.

“It is time for this situation to end,” French Foreign Minister Jean-Yves Le Drian said Saturday. “We cannot live forever on the cusp of Brexit. At some point, there’s an exit.”

Assessment

Our assessment is that Theresa May is starting a disaster, with her own political career being demolished with every failed plan she has suggested. We believe that reaching out to the opposition Labour party was a good move for the PM to make, despite her party’s reluctance to engage with Corbyn. We also feel that her desperate plea to extend the deadline made to both German Chancellor Angela Merkel and Emmanuel Macron may not bear any fruit for her. 

 

Image Courtesy: Christoph Scholz (https://commons.wikimedia.org/wiki/File:Europa-Karte_mit_Brexit_-_dunkel_(33442067808).jpg), „Europa-Karte mit Brexit - dunkel (33442067808)“, https://creativecommons.org/licenses/by-sa/2.0/legalcode