finance

Brexit’s big week baffles Brussels


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EU leaders will on Thursday try to achieve the impossible: navigating a cliff-edge Brexit with a prime minister already in freefall.

Angela Merkel, Emmanuel Macron and other EU leaders gather in Brussels for a summit that like so many others before it has been hijacked by Brexit.

It comes eight days before Britain’s scheduled departure date, and at the end of a week in which the EU has been trying to respond to a UK Brexit strategy that has been changing by the hour.

The political slalom of the last 48 hours has been so jarring that it’s useful to recap the pre-summit twists and turns.

On Tuesday, senior EU figures had been led to believe by David Lidington, the UK’s de facto deputy prime minister, that Britain would use Thursday’s EU summit to make two requests.

The first, a short extension to the Brexit process until June 30 that would be needed if UK prime minister Theresa May manages to finally win parliamentary approval for her withdrawal deal; the second, an option to have a longer delay of at least nine months if MPs reject the agreement so as to buy time for a major rethink. It aimed to confront Tory MPs with a stark choice: vote for the exit deal or face a long delay where Brexit might be lost altogether.

But that plan was dead before Mr Lidington was on his Eurostar home. The strategy came a cropper after a Brexiter-led cabinet revolt where ministers made painfully clear to Mrs May the political price of going through with including the long option.

With 48 hours to go before a crunch summit, Mrs May was without a plan and EU leaders were in the dark. Whatever the outcome, British officials were warned the summit response might not be as positive as Downing Street had hoped; the mood in European capitals was hardening, and some were arguing there should be no decision at all. By Tuesday evening, European Commission president Jean-Claude Juncker was being led to believe that Mrs May might not come up with a written request for a Brexit extension at all.

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Then things got worse.

According to senior EU diplomats, British officials were informing Brussels on Wednesday morning that Mrs May might turn up at the summit with a proposal for just a three-week extension. It was designed to buy time without annoying her cabinet hardliners, and take the UK through to the point where it would have to decide whether to participate in May’s European Parliament elections.

Not only was it an entirely new strategy, but it was precisely what some in Brussels sought to avoid: a proposal that opened the door to a series of incremental prolongations that would only postpone the moment of reckoning.

There was then some confusion over the form of the request: rather than a verbal pitch to leaders, London confirmed that it would be a letter. Meanwhile Mrs May’s negotiations with her cabinet rolled on, as cabinet ministers rolled into Downing Street.

Eventually Mrs May held a telephone call with Mr Juncker. The prime minister by now had reverted to supporting a three-month delay, while dropping the fallback option of a longer prolongation. 

This satisfied Brexiters in the cabinet, but left the Europhile wing in despair (Mr Lidington had publicly argued such a short, one-off extension would be “downright reckless”).

It also managed to annoy Mr Juncker, who had previously warned Mrs May not to go for June 30. Mrs May was again advised in no uncertain terms that the longest extension Brussels could countenance — without UK participation in the EU elections — was May 23, the date of the pan-EU vote.

Mrs May pressed on regardless and the letter finally landed in the inbox of Donald Tusk, European Council president, in the middle of the sacred Brussels lunchtime, packed with what one recipient called “irrational” drafting.

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The week’s disarray comes at a time when Brexit fatigue in Brussels is so dense it is tangible. One senior EU diplomat summed up the mood: “The European Union was not created to manage Brexit.”

So confronted with a broken prime minister with a last minute plan, what does the EU do next?

jim.brunsden@ft.com; @jimbrunsden

Chart du jour: Living on the edge

The UK wants to end the era of “low pay” and introduce the highest wage floor in the developed world — leap frogging the likes of France and Australia. (chart via FT)

Trans-Europe Express

Fidesz celebrates the naughty step
Hungarian prime minister Viktor Orban emerged from a three-hour European People’s party meeting with an indefinite suspension for his Fidesz party, which he hailed a “good decision”. He declared he was pleased with a “compromise” that will see Fidesz voluntarily give up all its voting rights in the EPP until a committee led by Herman Van Rompuy decides otherwise. The FT has the details.

Orban is still a loser
Ivan Krastev in The Guardian on why Europe’s rightwing populists won’t get too far just by bashing migrants — because voters don’t really care:

“Contrary to widespread opinion, countries such as Slovakia, Poland and Romania may well bring good news for pro-Europeans in these elections. Survey findings suggest Orbán has a weaker grasp on what issues truly matter today to central Europeans than the president of the European council, Donald Tusk — a staunch critic of Poland’s nationalist government.”

Dutchfication
Thierry Baudet’s upstart Eurosceptic FvD party has risen from nothing to become the second-largest in the Netherlands upper house, according to exit polls from a regional election on Wednesday. Dutch prime minister Mark Rutte’s four-party coalition lost its majority in the senate with the biggest drop for the conservative CDA and liberal D66. (NOS) Here’s the FT’s 2018 profile of the piano-playing Mr Baudet and his hipster brand of civilisational populism.

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Clear off
The European Central Bank is scrapping a request to give it more powers to regulate clearing houses, arguing that MEPs and EU capitals have ended up with a compromise that will do the bank more harm than good.

Life sentence
Bosnian Serb leader Radovan Karadzic has had his sentence for war crimes increased to life by UN judges in The Hague. (BBC)

Copyright conflict
The EU’s centre-left social democrats have decided to back a reform of copyright rules despite fierce petitioning and protests in Germany. Other big groups like the liberals and conservatives are still split over how to vote next week in Strasbourg.

Estonia’s hard-right
The Lisbon Council’s Luukas Ilves runs through the policy promises of Estonia’s extreme right nationalists who are on the verge of entering a coalition government for the first time. The manifesto includes a promise to hold a referendum on Estonia’s EU membership if more power is concentrated in Brussels and a ban on non-Estonians voting in local elections.

The Brexit party
The leader of Nigel Farage’s new pro-Brexit party has been forced to resign over anti-Islam messages she posted on social media. (The Guardian)

mehreen.khan@ft.com; @mehreenkhn





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