Bottom-Line Brexit Part VI

What business needs to know about how Brussels sees the process of the UK leaving the European Union, as related to BCW by senior EU sources.

        April 12 is the new March 29

As we have predicted, The UK will not leave the European Union on March 29. But a high-pressure Brussels summit on Thursday night has pushed the quite strong possibility of a no-deal Brexit out by only a few more weeks. Next week’s third vote in the House of Commons on whether to choose Prime Minister Theresa May’s soft Brexit deal will be key.

EU leaders have concluded May has little chance of winning. Her attempt on Thursday to reassure them backfired. French President Emmanuel Macron, channeling Charles de Gaulle in his increasing impatience for a Brit-free Europe, declared he had cut her odds to 20-1 from 10-1. That was “very optimistic”, summit chair Donald Tusk told him.

The leaders then decided to dodge the bullet of a crisis summit next Thursday at which they would have had the unpleasant choice of either chucking the UK out with 24 hours’ notice or blinking at their own deadline and giving the rebellious Commons more time anyway, In a neat shimmy in the blame game, they set a new deadline of Friday, April 12, for Britain to make its own choice clear to them – either leaving, deal or no deal, before July; or coming up with a new proposal agreed by Parliament and then sticking together or sticking around for a year or so and organizing EU parliamentary elections in the UK on May 23. The trigger deadline corresponds to six weeks before May 23, the last date on which Britain would have to launch the election process under its own electoral laws.

Worries about the legal risk of disruption to the EU institutions of a British failure to take part in the election also explain the deadline of May 22 as the last day on which Britain can remain a member if May succeeds in winning her vote and securing a gentle transition to non-membership. Those extra few weeks beyond March 29 are needed to pass necessary laws.

If she doesn’t win next week – the EU’s assumption – then she and parliament will have until April 12 to make a fateful decision. France is keen that Britain actually leave on April 12 but others are willing to give it a bit more time. In theory, Britain could still sign up to the Withdrawal Agreement and win the transition period that will help business. It could in theory leave as late as June 30. That will be decided by another summit a bit before April 12 to decide exactly what to do. One possibility is that Britain would agree to a hard-Brexit no- deal departure on, say, May 15. It could use the intervening time to strike some mitigating bilateral temporary deals to ease trade and travel disruption or Parliament could attempt to wrest control from a divided government and hammer out a cross-party deal for a softer Brexit. This might mean deciding to stop the clock for a year. Or it could decide to stop the clock for a year or so, hold EU elections and then perhaps a second referendum on whether to push ahead with Brexit. Let’s not even talk about the theoretical possibility that a new leader could pull the plug and unilaterally revoke the Article 50 notification of withdrawal.

No one is claiming that real certainty has been provided this week to the poor trader and ordinary citizens caught up in all this. What the summit has achieved is a political win for Brussels in more clearly shifting the responsibility for pulling the plug on EU membership to London. Eyes on the House of Commons next week.

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