Radical Rethink Needed to Get Brexit Deal, EU Tells May
(Bloomberg) -- The scale of Prime Minister Theresa May’s Brexit defeat has convinced the European Union to demand she radically rethink the U.K.’s red lines as the bloc signaled its willingness to delay Britain’s withdrawal by many months.
In the run-up to Tuesday night’s parliamentary vote, the EU was preparing to make limited concessions over the Irish border backstop if it thought that it could swing the majority of British lawmakers behind the deal.
But May’s 230-vote loss means European governments now believe the U.K.’s problems with Brexit are more fundamental than that one issue, three diplomats said.
The move adds to growing evidence that Brexit is unlikely to happen on the long-scheduled date of March 29, with European governments willing to delay Britain’s departure well into the second half of the year, according to diplomats who spoke on condition of anonymity because of the sensitivity of the discussions.
But they’ve told May she needs to enter into credible cross-party discussions to ensure there’s a unified British position on Brexit, then present the EU with a roadmap for the way forward. That could see U.K.-EU negotiators reopen the political declaration -- the part of the agreement dealing with future relations -- to make it less vague on future ties, the diplomats said.
Such a step could mean the U.K. signs up permanently to a customs union with the EU, which has been one of May’s red lines but is the policy of the opposition Labour party.
It would remove the need for many elements of the backstop, which is designed to avoid a hard border on the island of Ireland, but would anger pro-Brexit lawmakers who believe it keeps Britain too closely aligned to the bloc.
Veteran Pro-EU Conservative lawmaker Kenneth Clarke sketched out such a scenario when he spoke on Wednesday in Parliament, saying there are majorities against a no-deal Brexit, in favor of delaying the U.K.’s exit and in favor of some form of customs union with the EU.
“She must now modify her red lines which she created for herself,” he said, “and find a cross-party majority which will be along the lines that I have indicated.”
Heavy Defeat
After the defeat on Tuesday, May pledged to seek consensus from across the political divide to find a way through the Brexit impasse, although Labour are angry than she wants to talk to rank-and-file lawmakers rather than the party’s leadership.
EU governments disagree over whether May should be allowed to extend the U.K.’s negotiating period. Some believe their vision for getting the deal passed can still be achieved over the next 10 weeks, others think an extension is needed that could stretch Britain’s membership well into the second half of 2019.
May told Parliament on Wednesday that the plan was still to leave on March 29 but left the door open to an extension. U.K. Chancellor of the Exchequer Philip Hammond floated to businesses the prospect of a delay to the end-of-March departure date.
May is not now expected in Brussels this week because she needs to tackle her domestic problems, according to EU diplomats, although she will contact EU leaders on Thursday, according to a person familiar with the situation. An extraordinary summit of EU leaders to help May sell the deal is likely before the next regular meeting at the end of March.
©2019 Bloomberg L.P.