Brexit Talks Head for Late Showdown as No-Deal Crisis Looms

U.K.'s economyThe British flag with an exit sign superimposed on October 19, 2016 in Paris. AFP PHOTO / LIONEL BONAVENTURE
  • Brexit Talks Head for Late Showdown as No-Deal Crisis Looms

Theresa May and the European Union are heading for a high-stakes, last-minute gamble that will decide whether the U.K. leaves the bloc with or without a deal, people familiar with both sides said.

On March 21 — just a week before Britain is due to exit the EU — the prime minister will have the chance to win a late concession from European leaders at a summit in Brussels, the people said. The bloc is unlikely to offer sweeteners much sooner in case the U.K. side asks for even more, according to one of the individuals, who asked not to be named.

As the deadline looms, May would then put her revised deal to Parliament in London to approve, forcing politicians to choose between an orderly divorce and a potentially chaotic no-deal Brexit that could hit the pound by as much as 25 percent.

While some ministers in May’s government believe the threat of an economic disaster will force her opponents to back her plan, other government officials believe such a strategy is too risky and must be stopped.

Keith Simpson, a usually loyal Conservative, said May is using dangerous delaying tactics, warning that he would not accept a no-deal Brexit. “Her scheme is to run the clock down so people are more likely to accept her deal,” Simpson said. “It’s a high-wire act and — gulp — might lead to a no-deal.”

The U.K. is on course to plunge out of the EU with no new trade agreement in place on March 29. The divorce accord that May spent a year and a half negotiating was overwhelmingly rejected in a parliamentary vote Jan. 15. In the month since that record defeat, May has been trying to agree changes to the divorce package to make it acceptable to members of Parliament.

May spent two-and-a-half hours Tuesday urging the House of Commons to give her more time to negotiate better terms. She faced accusations that she’s deliberately looking to kill time off the clock in order to blackmail Parliament into backing her blueprint.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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