With British government, parliament and people divided, disorderly Brexit looms

LONDON/BRUSSELS (Reuters) – The European Union warned on Tuesday that Britain could be heading for a potentially disorderly exit in just 10 days time as Prime Minister Theresa May met with ministers to thrash out ways to break the protracted Brexit deadlock.

Nearly three years since Britons voted to leave the EU in a shock referendum result, May’s exit strategy is up in the air as her government and party are still squabbling over how, when or even if Brexit should happen.

Her divorce deal with the EU has been defeated three times by the lower house of the British parliament, which failed on Monday to find a majority of its own for any alternatives. She is expected to try to put her deal to a fourth vote this week.

The impasse has already delayed Brexit for at least two weeks beyond the planned departure date to 2200 GMT on April 12.

“If the United Kingdom is not capable, almost three years after the referendum, of coming forward with a solution that is supported by a majority, it would have effectively chosen a no-deal exit on its own,” French President Emmanuel Macron said.

EU chief Brexit negotiator Michel Barnier said “a no-deal scenario” has become more likely, while European Central Bank policymaker Francois Villeroy de Galhau said markets needed to price in the growing risk of a no-deal.

Ministers spent seven hours in Downing Street as May chaired cabinet meetings in a bid to find a way out of the crisis. It was unclear what, if anything, had been agreed by her cabinet, deeply divided between pro-Brexit and pro-EU ministers.

The cacophony of warnings over an economically disruptive Brexit without a transition deal has ratcheted up the pressure on British lawmakers as some try to legislate to prevent a no-deal.

If May cannot get her deal ratified by parliament then she has a choice between leaving without one, trying to trigger an election or asking the EU for a long delay to negotiate a Brexit agreement with a much closer relationship with the bloc.

Given that the British electorate, the two major parties and the cabinet are all polarized over Brexit, May risks ripping her Conservative party apart whichever way she tilts.

ANOTHER BREXIT DELAY?

At least half of her largely eurosceptic party wants to leave the EU without a deal, though some lawmakers and ministers are telling her she must keep Britain firmly within the bloc’s economic orbit for the sake of British business and jobs.

The third defeat of May’s deal in parliament on March 29 even after pledged to quit if it was passed has left the weakest British leader in a generation facing a spiraling crisis.

With Brexit stalled, lawmakers have been trying to come up with an alternative but has thus far failed.

Britain’s Prime Minister Theresa May attends a Serious Youth Violence Summit in Downing Street, London, Britain April 1, 2019. Adrian Dennis/Pool via REUTERS

The option that came closest to obtaining a majority in parliament on Monday was a proposal to keep Britain in a customs union with the EU – it was defeated by just three votes.

A proposal to hold a confirmatory referendum on any deal secure the most votes, but was defeated by 292-280.

A group of lawmakers said on Tuesday they would try to pass legislation which would force May to seek a delay to Brexit and thus prevent a no-deal crash-out on April 12.

For now, May’s own deal is back in focus, though she must find a way to get around a ban on repeatedly bringing the same package to a vote in parliament.

May will set out next steps ahead of an emergency EU summit on April 10, her spokesman said. She remains opposed to another referendum, he added.

“I hope that we can still find a solution. The British parliament has said itself that it doesn’t want a disorderly Brexit,” German Chancellor Angela Merkel said.

Macron, speaking at the Elysee Palace alongside Irish Prime Minister Leo Varadkar, said it was for Britain to decide whether the plan involved an election, a referendum or a customs union.

“It’s up to London to say it, and to say it now,” he said. “The EU can’t be taken hostage by a British political crisis over the long term. We have a future to build together.”

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Such is the volatility of Brexit news from London that some traders have stepped away from sterling – which has seesawed on Brexit news since the 2016 referendum.

Sterling fell toward $1.30. The EU said a no-deal would disrupt financial markets and have an impact on liquidity.

Automaker Ford also sounded the alarm bells, saying it would have to consider what actions to take to protect its business in the event of a no-deal Brexit.

No-deal means there would be no transition so the exit would be abrupt. Britain is a member of the World Trade Organization so tariffs and other terms governing its trade with the EU would be set under WTO rules.

Additional reporting by Jan Strupczewski in Brussels, Andreas Rinke and Michelle Martin in Berlin, Kylie MacLellan and Ritvik Carvalho in London and Tom Miles in Geneva, Richard Lough, Michel Rose and John Irish in Paris; Writing by Guy Faulconbridge; Editing by Michael Holden and Mark Heinrich



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