Brexit: End of May, start of June

Despite loud protest and prior insults on both sides, the President of the United States Donald Trump visited the UK for a state visit on 3 and 4 June. After a state banquet on Monday, Trump met Prime Minister Theresa May on Tuesday. On Brexit he recommended the UK to walk away from talks with Brussels and to refuse to pay Britain’s agreed divorce bill. Furthermore, Trump said that a big trade deal with the UK would be possible if the UK will eventually leave the EU during a business breakfast meeting with five top companies each from Britain and the United States.

This will be the last state visit for May because she will leave Number 10 this Friday 7 June. The leadership race has already started with more than 10 Conservative MPs indicating their wish to succeed May. Normally, the whole process would take a few months but due to the lack of time to find a Brexit deal, the Conservative Party introduced new rules, including measures to eliminate candidates more quickly. The Conservative Party wants to finish the leadership race before the end of July so the new Prime Minister will have (only) three months before the Brexit day on 31 October. A new Prime Minister and new leader of the Conservative Party is expected to be announced in the week of 22 July. Boris Johnson seems to be the leading contender and already said that the UK will leave the EU on 31 October with or without a deal.

On the other side of the Channel a document was leaked this week with the new priorities for the next Finance Commissioner. A new strategy for the capital markets union, fintech, financial stability, sustainable economy and Brexit are key points for the next 5 years. Concretely for Brexit, the Commission officials recommend looking into the right balance between the EU and non-EU financial services. This would include the monitoring of the recognition of non-EU financial frameworks (equivalence decisions). The EU executive will also assess the autonomy of the EU financial infrastructure and important European financial players.

What’s next?

In the coming weeks UK politics will mainly focus on the Tory leadership race, and therefore also on their specific positions regarding Brexit. The question is, will the new leader of the Conservative Party and Prime Minister be a moderate Brexiteer as May or a hard Brexiteer and, therefore, even determined to leave the EU without a deal.

At the end of June there is also an EU Summit. French President Emmanuel Macron has already made clear that he wants to move on with the EU and, therefore, reopening negotiations on Brexit will not happen. 31 October remains the final deadline.


Brexit: Searching for a new leader

The resignation of Prime Minister Theresa May last week could not save the Conservative Party in the European elections. It was quite clear that the Brexit Party of Nigel Farage is the winning party, gaining 29 seats. The Liberal Democrats took 16 seats, the Labour Party 10, the Green Party 7, the Conservative Party 4, the Scottish National Party 3 and Plaid Cymru 1.

As the election results were devastating for the traditional parties, Labour deputy leader, Tom Watson, indicated that the Brexit stance of Labour costed Labour a lot of votes. In particular, the unclear position of Labour towards a second referendum. In addition, shadow chancellor John McDonnell, one of Labour leader Jeremy Corbyn’s closest political allies, told the BBC another referendum may be the only way to break the Brexit deadlock in Parliament.

But Brexit did not only had a huge effect on the elections in the UK, but actually in the whole European Union, at least that is what President of the European Council Donald Tusk claimed at yesterday’s informal European Council summit. Tusk argued that Brexit acted as a “vaccine” against Euroscepticism and, therefore, helped to limit the profit of anti-EU parties. Tusk also added that he is not optimistic about the future of Brexit, because “we are all aware of the state of things in London.” A no-deal scenario or the UK revoking Article 50 remains likely. Influential Tories, Boris Johnson and Dominic Raab, are for example still willing to leave the EU without a deal.

In the meantime, the European Union is preparing itself for Brexit, with or without a deal. When Theresa May offered her resignation last week, EU leaders already warned that nothing had changed in Brussels. The Dutch Prime Minister, Mark Rutte, is one official who said the EU would never reopen negotiations on the Brexit divorce deal, whoever succeeded May. Furthermore, a spokeswoman for the President of the European Commission, Jean-Claude Juncker, said that “Brussels’s position on the withdrawal agreement has been set out, there is no change to that.” In addition, Sabine Weyand, Deputy Chief Negotiator and right hand of Michel Barnier within the European Commission’s Article 50 Taskforce, has been appointed today as the new Director-General of Directorate-General Trade. This indicates that the European Union is preparing itself for the next step in the Brexit process as Weynand will lead the EU’s negotiations with the UK on its future trade relationship in the post Brexit phase.

What’s next?

It is still unclear if there will be a vote on the Withdrawal Agreement Bill next week as Theresa May announced earlier. For the time being the focus is more on the possible successor of May. Tory MPs have until 10 June to put their name forward, and the party hopes a new leader will be in place by the end of July. In addition, a possible general election seems unlikely. Foreign Secretary, Jeremy Hunt, already said that the Conservative Party would commit “political suicide” if a general election was held.


Brexit: the eye of the storm

After weeks of talks between the Conservatives and Labour to find a compromise Brexit deal to pass in the House of Commons, the dialogue collapsed without agreement. However, this came as no surprise as it was already clear that the two main parties are deeply divided over Brexit. In addition, the cross-party cooperation was not supported by backbenchers of either parties.

The failure of the cross-party dialogue, exacerbated by Theresa May’s own unstable position and increasing pressure from her colleagues to leave, incentivized May to announce that she will set a timetable for her departure. Before departing, May will still try to avoid British MEPs actually having to take up their seats in the European Parliament after the elections held today (Thursday, 23 May). She will also push for the new Withdrawal Agreement Bill to be voted on in June. As a compromise in the negotiations with Labour, the new Brexit deal would include a provision that states the UK Parliament has the final say on the backstop. Additionally, the bill would also grant Westminster the power to weigh on the future relationship between the EU and UK.

As May feels pressurized, she even announced a concession on a second Brexit referendum during a keynote speech in London. Concretely, a vote for a second referendum would be possible if her new Withdrawal Agreement Bill passes onto the next stage of the legislative process. In that case, May wants to give anti-Brexit MPs the chance to add the option of a second referendum to the new bill once it has gone through its second reading, a stage where MPs can attach amendments.

It seems that May is able to survive the latest storm, but for how long? After a lot of rumours, it was not the Prime Minister, but leader of the House of Commons Andrea Leadsom who announced she quits the government over Brexit and May’s handling of the process. Her resignation is the 36th by a minister under May and the 21st minister to quit over Brexit. Political pundits believe May’s resignation could be announced in a matter of just a few days.

What’s next?

The Conservatives are expected to perform badly in the European elections. Perhaps a departure of Prime Minister Theresa May after the elections could be a way to end a disastrous chapter in Tory/UK history and open up a new, more hopeful one. More ministerial resignations could still follow too, but not today. Today is voting time.

Brexit: Breakthrough in cross-party talks?

Whilst it is very likely that the United Kingdom will have to participate in the European elections, Prime Minister Theresa May is still trying to find a deal before 23 May, the day of the elections in the UK. She announced this week that she wants to finalize the cross-party discussions with Labour and stated on 2 May that after a month of talks, a new Brexit deal could be in sight.

However, the crucial point raised by Labour regarding staying in the customs union with the European Union remains still open for discussion. May stated that the Government and the Labour Party, are “trying to achieve similar aims in the area of customs, which is to protect jobs.”

The other hot issue in the Brexit negotiations, the Irish border, will be discussed in a new Alternative Arrangements Commission, which aims to develop alternative solutions to a hard Irish border and was launched this week by the politically independent platform Prosperity.

If no agreement is reached, May also said this week that the government would give Members of Parliament the chance to vote on a series of options, with ministers abiding by the outcome. In any case May believes she can still avoid the European elections. The Chairman of the Conservative Party, Brandon Lewis also told the BBC on 2 May that there is still some time for the Parliament to approve the Withdrawal Agreement.

In the meantime, life continues. Today voters are heading to the polls for council and mayoral elections across England and Northern Ireland. This is the biggest set of local elections in England’s four-year electoral cycle, with more than 8,400 seats being contested. The elections are not, as usual, dominated by local issues, but actually only concern Brexit. The Conservatives are set to lose 800 councillors according to projections. The projections also suggested that Labour could gain 300 seats and the Liberal Democrats 500. Neither Nigel Farage’s Brexit Party nor Change UK are contesting the local elections.

Next steps?

So the aim for Theresa May and Jeremy Corbyn is still to make an announcement on a possible compromise deal as quick as possible. Not only the Government is under pressure, but also Labour leader Corbyn. Many Labour members are in favour of a second referendum, yet the Labour Party’s National Executive Committee (NEC) agreed that its manifesto for the European Parliament elections will reflect the existing Labour Party position on Brexit, without a stronger commitment to a second referendum.

The big questions are: is it possible to find a deal before 23 May and even then will it get the support of the House of Commons?