Europe Is Preparing for the End of Theresa May

Lionel Laurent
Europe Is Preparing for the End of Theresa May

(Bloomberg Opinion) -- Europe is no stranger to last-ditch emergency summits in which 28 countries try to patch up their differences in the face of a crisis, or on the brink of a meltdown, or at the precipice of disaster – whichever way you choose to phrase it. The only unknown is at which ungodly hour bleary-eyed officials will emerge with a solution.

What made Thursday’s Brexit crunch point especially alarming is that the worst-case scenario – Britain crashing out of the EU without a deal – is an economically calamitous outcome that neither side can agree on how to avoid. Westminster has twice rejected Theresa May’s agreed Brexit deal, and Brussels has rejected any attempt to renegotiate.

With no obvious way of stopping the clock on the Article 50 departure process (besides a cancellation by the Brits that would be hugely divisive in the country), Thursday’s meeting of European leaders was about agreeing a delay to the March 29 deadline that could also serve as a way out of the impasse by bouncing the U.K. into action.

The result was part can-kicking exercise and part insurance policy against an unpredictable Britain. Prime Minister Theresa May’s lamentable domestic performance this week, when she seemed to have capitulated to the “no deal” zealots within her parliamentary party, left Europe with little choice but to seize some control of the situation.

EU leaders have offered a two-month technical delay if May gets her deal over the line after a third attempt, and a two-week one if she fails – by which point Britain will need to decide whether to head into the hills without an agreement or request a much longer extension to the Article 50 process. A blunter interpretation would be: The first delay is for May, the second will be for whoever almost inevitably replaces her as prime minister. Given that French president Emmanuel Macron gives her deal a 5 percent chance of passing through the U.K. Parliament, you can see where this is headed. 

The thing keeping hope alive for some of the EU heads of state is that U.K. lawmakers have opposed a no-deal exit and are in favor of an an extension. It suggests there may be more benign partners to work with than someone who appears to put Conservative Party unity ahead of the national interest, and economic sanity.

The relief of a temporary hiatus, and the reassurance that nobody is in a desperate hurry to pull the plug on the U.K., eased the pressure on the pound, which had fallen sharply on Thursday as no-deal fears spiraled. But we still don’t have any finality on how this mess will be cleaned up. Yes, more time is good; politicians are always happy to claim credit for avoiding catastrophe. It’s also encouraging to see the EU try to make sure the forthcoming European elections don’t become a Brexit-spoiled fiasco. Yet there’s every chance that the U.K. and Europe will remain at an impasse in April.

Even if May is defeated and subsequently goes (not a 100 percent certainty given her almost maniacal sense of party loyalty), it’s optimistic to believe this will fix everything. There may well be a majority of British MPs who would back some sort of softer Brexit, perhaps with a commitment to remain in the customs union and possibly the single market. But both major parties are divided on the issue, and their leaders have shown no aptitude for solving the debacle. It’s entirely possible that May could be replaced by a hard Brexiter like Boris Johnson. 

Philippe Lamberts, a member of the European Parliament who sits on the Brexit steering committee, told me last night that he was opposed to the unconditional delay and was pessimistic about the ability of British MPs to get their act together. His view is common in Brussels. The longer Brexit drags on, the more “the gangrene” of the U.K. will infect the inner workings of the EU. It’s why Macron toyed with the notion of an amputation, before reportedly being talked down by Germany’s Angela Merkel.

Brexit has been a glue for EU member states thus far. But the prospect of the U.K. sticking around for European elections and the appointment of a new Commission threatens to drive a wedge between traditional liberal allies such as the Netherlands and Germany and federalists like France. The exchanges between Macron and Merkel were tense. Dodging the no-deal bullet has consequences.

To contact the author of this story: Lionel Laurent at llaurent2@bloomberg.net

To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.

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