Brexit Bulletin: Over to EU

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(Bloomberg) — Today in Brexit: Theresa May heads to Brussels, pushing for a three-month delay as the U.K.’s political crisis deepens.

Every day feels like the most important 24 hours in Theresa May’s premiership. Since the last one.

Fresh from a defiant statement to the nation late last night, in which she blamed lawmakers for the current Brexit crisis, the prime minister travels to a European Union meeting to press EU counterparts on her request for a short extension.

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May’s move for a limited Brexit delay to June 30 was met with anger in Parliament, which voted last week to seek a longer extension if May’s withdrawal agreement hadn’t been approved by now. The move also took the EU by surprise.

Nevertheless, the EU’s public view holds firm. European Council President Donald Tusk says a short delay is only possible if Parliament approves May’s twice-rejected withdrawal agreement by the existing exit day, March 29. Hoping for this outcome remains the EU’s Plan A.

But the combination of May’s request and Tusk’s response has focused minds once again on the prospect of the U.K. tumbling out without a deal if the withdrawal agreement is rejected once again. Labour lawmakers who might be needed to win any vote are not happy.

The real drama for the EU comes in deciding what to do if the deal fails again. An emergency summit penciled in for next week could result a long extension to the negotiations, but with conditions attached, potentially including ripping up May’s proposal, calling a British election and even a second referendum.

Any long extension would require the U.K. to participate in European elections, a divisive step May said in Downing Street last night she was strongly opposed to.

As it so often goes with the EU, get ready for some high-stakes, eleventh-hour brinkmanship.

Today’s Must-Reads

  • U.K. business is in despair over Theresa May’s latest moves, with even a short delay meaning stockpiles will have to be replenished, factories idled and uncertainty would continue to weigh on investment.
  • Europe is deeply unimpressed with Britain’s handling of Brexit, the Guardian reports, saying the U.K.’s reputation for diplomacy, pragmatism and self-restrained is all but gone.
  • Can’t remember how we got here? Bloomberg’s Rob Hutton uncovers the roots of Brexit.

Brexit in Brief

Pound Falls | The pound fell to a one-week low after Theresa May confirmed she was only seeking a short Brexit delay and the request was met with EU skepticism. Still, sterling remains the best-performing Group-of-10 currency this year, up more than 3 percent against the dollar. 

Steady at the Bank | The Bank of England is expected to hold U.K. interest rates today, with little room for maneuver amid the Brexit fog. Here’s our decision-day guide.

Roger That | Ivan Rogers, the U.K.’s former envoy to the EU, thinks the bloc’s uncompromising stance towards a Brexit extension could help May get her divorce deal through Parliament. “It amplifies the message she’s trying to give people that it’s my way or the abyss,” he told reporters in Dublin on Wednesday.

Dimon Warning | A messy Brexit is now more likely and would be a “huge negative” for the U.K., according to JPMorgan Chase CEO Jamie Dimon. Dimon has previously said that the U.K. is unprepared for no-deal and last week put its probability at 10 percent.

Donor Strike | The Conservative Party’s botched handling of Brexit is starting to hit it in the pocket, Bloomberg’s Rob Hutton and Kitty Donaldson report. Donations to the Tories are drying up because backers are upset with their internal divisions, lawmakers were told by party bosses late Wednesday.

Trucker Trouble | Brexit is set to exacerbate a chronic shortage of drivers among U.K. haulage companies, according to the International Road Transport Union. Britain relies heavily on EU drivers, particularly from countries like Poland and Romania, and shortages could increase transport costs and delay deliveries, the IRU said.

Want to keep up with Brexit?

You can follow us @Brexit on Twitter and join our Facebook group, Brexit Decoded

To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Jones Hayden

©2019 Bloomberg L.P.

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