Site icon Money & Markets, LLC

Newest Brexit Deal Must Pass or Britain Will Plunge into Political Uncertainty

May-Brexit

British Prime Minister Theresa May said Wednesday that a draft divorce deal with the European Union delivers the Brexit that Britons voted for, as she tried to persuade her divided Cabinet that it must back the agreement or plunge the U.K. into political and economic uncertainty.

May called a special Cabinet meeting after negotiators from Britain and the European Union broke a months-long logjam and reached agreement on divorce terms, including a plan to keep the border between Ireland and Northern Ireland open after Brexit.

Ahead of the 2 p.m. (1400 GMT) meeting, May told lawmakers in the House of Commons that the draft deal “takes us significantly closer to delivering what the British people voted for in the referendum” of 2016 that opted to leave the EU.

May said Britain would “take back control of our borders, our laws and our money … while protecting jobs, security and the integrity of our United Kingdom.”

But Pro-Brexit lawmakers in May’s Conservative Party — a group that includes some members of the Cabinet — say the agreement will leave Britain tethered to the EU after it departs and unable to forge an independent trade policy.

Euroskeptic Conservative legislator Peter Bone warned May that “if the media reports about the EU agreement are in any way accurate you will not be delivering the Brexit people voted for and today you will lose the support of many Conservative (members of Parliament) and millions of voters across the country.”

May’s supporters argue that the deal is the best on offer, and the alternatives are a chaotic “no-deal” Brexit that would cause huge disruption to people and businesses, or an election that could see the Conservative government replaced by the left-of-center Labour Party.

Former Foreign Secretary William Hague warned “ardent Brexiteers” that if they shoot down May’s deal, it could lead to a change of government and a new referendum and “Brexit might never happen at all.”

Failure to secure Cabinet backing will leave May’s leadership in doubt and the Brexit process in chaos, with exit day just over four months away on March 29.

If Cabinet supports the deal, it still must be approved by leaders of the 28-nation EU. Irish Prime Minister Leo Varadkar said EU leaders had penciled in a Nov. 25 Brexit summit to discuss the deal — though he cautioned nothing was guaranteed and much could still go wrong.

Then May will need to win backing from Britain’s Parliament — no easy task, since pro-Brexit and pro-EU legislators alike are threatening to oppose it.

The main obstacle to a withdrawal agreement has long been how to ensure there are no customs posts or other checks along the border between the U.K.’s Northern Ireland and EU member Ireland after Brexit. Britain and the EU agree that there must be no barriers that could disrupt businesses and residents on either side of the border and undermine Northern Ireland’s hard-won peace process.

The proposed solution involves a common customs arrangement for the U.K. and the EU, to eliminate the need for border checks, with some provisions that are specific to Northern Ireland.

The solution is intended to be temporary, but pro-Brexit politicians in Britain fear it may become permanent, hampering Britain’s ability to strike new trade deals around the world.

Pro-Brexit former Foreign Secretary Boris Johnson said the agreement would make his favored option, a loose Canada-style trade deal with the bloc, impossible. He tweeted: “Cabinet must live up to its responsibilities & stop this deal.”

Northern Ireland’s Democratic Unionist Party, which props up May’s minority government, said it would oppose any deal that leaves Northern Ireland subject to different rules to the rest of the U.K. after Brexit.

DUP chief whip Jeffrey Donaldson said the proposed deal threatens “the constitutional and economic integrity of the U.K.”

“That is not something we can support,” he told the BBC.

May also faces growing opposition from pro-EU lawmakers, who say her proposed Brexit deal is worse than the status quo and the British public should get a new vote on whether to leave or to stay.

Sophie in ‘t Veld, a Dutch member of the European Parliament who is deputy to the legislature’s Brexit chief Guy Verhofstadt, said the real problem during the negotiations “lies within the U.K., within the government, within the Tory party, between the parties, because there has not been any agreement over the relationship with the EU between any of them over the last two years.”

“That is the real problem, because if the U.K. had a single agreed line, backed by the majority of parties and the majority of MPs, then the whole situation would not be so unclear,” she said.

© The Associated Press. All rights reserved.