LONDON/BRUSSELS (Reuters) – The United Kingdom is due to leave the European Union in less than a month, yet there is still no ratified divorce deal so it faces three main options – swing behind Prime Minister Theresa May’s deal, leave without a deal in late June or throw the question back to the people.
1) MAY’S DEAL: May comes back with a tweaked deal which Brexit rebels support because they fear the entire process will be hijacked by those who want to keep Britain in the EU. If rejected a second time, May delays Brexit and tries again.
May is hoping to bring back a tweaked divorce accord for a parliamentary vote, which could come as early as next week but may not take place until March 12.
Lawmakers voted 432-202 on Jan. 15 to reject her deal, the biggest parliamentary defeat for a government in modern British history, and then on Jan. 29 insisted she renegotiate the Irish border backstop.
May promised to seek “legally binding changes” to the Withdrawal Agreement, though the aim now appears to be to secure agreement on “alternative arrangements” for the backstop so, if it is ever used, it would not endure indefinitely.
Both sides are looking at a possible legal addendum to reassure lawmakers who worry that the Irish border plans could keep Britain trapped in the EU’s orbit for years.
If Britain’s Attorney General Geoffrey Cox can clinch a legal fudge, he would be able to change his legal advice and that, it is hoped, would bring Brexit-supporting Conservative Party lawmakers behind the deal.
Jacob Rees-Mogg, a leading Brexiteer, said he could live with a time-limited backstop, though on Jan. 27, 20 Conservative lawmakers voted against May’s new timetable and 88 abstained.
“We continue to see the most likely outcome of the current impasse as eventual ratification of the prime minister’s Brexit deal, with a three-month extension of Article 50,” Goldman Sachs said.
Goldman raised the probability of that outcome to 55 percent from 50 percent while cutting its view of no-deal Brexit to 10 percent from 15. It kept no Brexit at 35 percent probability.
2) DELAYED NO-DEAL: May’s deal is rejected so she extends but Britain has burned through so much political capital in Brussels that it fails to get a deal good enough for Brexiteers in the Conservative Party. Amid the political chaos in London, Britain leaves in June/July 2019 without a deal to smooth the transition.
If May’s deal is rejected, parliament will get to vote by March 13 on whether or not to go for a March 29 no-deal.
Lawmakers are almost certain to reject such an option and will then have a March 14 vote on a short Brexit delay, probably extending until late June.
May has repeatedly refused to take no-deal off the table.
French President Emmanuel Macron said the EU would agree to extend the Brexit deadline only if Britain justified such a request with a clear objective. German Chancellor Angela Merkel was softer, saying Berlin would not refuse Britain more time.
The EU’s chief negotiator Michel Barnier said Britain would have to have a good reason.
“There are some alternatives to May’s plan on the table but they are either not compatible with EU laws or not applicable in the short-run. Or both,” said one EU diplomat, adding member states were uncomfortable with a long extension. “It’s not about the UK, it’s about paralyzing the EU.”
No-deal means there would be no transition so the exit would be abrupt, the nightmare scenario for international businesses and the dream of hard Brexiteers who want a decisive split.
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.
Business leaders are triggering contingency plans to cope with additional checks on the post-Brexit UK-EU border they fear will clog ports, silt up the arteries of trade and dislocate supply chains in Europe and beyond.
Brexit supporters say there would be short-term disruption but in the long-term the UK would thrive if cut free from what they cast as a doomed experiment in German-dominated unity that is falling behind China and the United States.
3) REFERENDUM: May’s deal fails and lawmakers decide to pass the decision back to the people. Brexit would have to be delayed beyond the end of June but with such a specific reason, the EU would likely agree to a delay.
The outcome is unclear.
Since the 2016 referendum, opponents of Brexit have sought another vote they hope would overturn the result. May has repeatedly ruled this out, saying it would undermine faith in democracy among the 17.4 million who voted in 2016 to leave.
A new referendum can only be called if it is approved by parliament and there is currently no majority in favor of one.
The opposition Labour Party will back a new referendum after parliament defeated its alternative plan for leaving the European Union, its eurosceptic leader Jeremy Corbyn said.
Corbyn, who voted against membership in 1975 and gave only reluctant backing to the 2016 campaign to remain in the EU, on Wednesday gave ambiguous backing for another referendum, saying he would push for one alongside a national election.
It is the first time since Britons voted in 2016 to leave the EU that one of its two major political parties has thrown its weight behind giving voters a chance to change their minds.
If parliament agreed to a second referendum, Britain would have to ask for an extension beyond March 29 to allow enough time for a campaign, probably by withdrawing its Article 50 formal departure notification.
The Electoral Commission would have to agree what question, or questions, would be asked of the public.
At the highest levels of government, there are worries that a second referendum would exacerbate the deep divisions exposed by the 2016 referendum, alienate millions of pro-Brexit voters and stoke support for the far-right.
If Britons voted to remain, Brexit supporters might demand a third and decisive vote.
A new party backed by Nigel Farage, the insurgent who helped shove Britain toward the EU exit, has a message for the country’s leaders: The foundations of the political system will explode if Brexit is betrayed.
Writing by Guy Faulconbridge; Editing by Janet Lawrence