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Tuesday 20th March 2018

May Requests Delay, Tusk Says Possible if MPs Back Deal


7Dnews London - Reuters/AFP

Wed, 20 Mar 2019 18:20 GMT

British Prime Minister Theresa May has formally asked EU leaders for an extension to Article 50. On March 20th she told Parliament that she had written to Council President Donald Tusk asking for an extension but saying that she was not prepared to accept a delay beyond June 30th, according to BBC News.

Tusk has said that a short extension is possible but only if there is a “positive” vote in the UK Parliament on her withdrawal deal next week. The EU’s chief negotiator, Michel Barnier, believes any long Brexit delay would pile on economic and political costs for the European Union, stressing that these would need to be weighed up carefully against potential benefits. "Extension would extend uncertainty and uncertainty costs. We cannot prolong uncertainty without having a good reason for it," Barnier told a news conference ten days before Brexit is due to happen.

The Czech Republic may support a delay to the date of Brexit at the upcoming European Council meeting, Prime Minister Andrej Babis said on March 20th. "We are ready to support postponing Brexit beyond the date (March 29th). Britain has to indicate the specific purpose of such an extension and a plan of further actions," Babis told lawmakers at a parliament committee session. The Swedish Prime Minister, Stefan Lofven, said Sweden should support a request by Britain to extend the deadline for its divorce from the European Union, news agency TT reported on March 20th.

Markets swing

The uncertainty about Brexit has affected British annual inflation, which nudged higher in February, as reported by the Consumer Prices Index 12-month rate. Inflation climbed to 1.9% last month, up from a two-year low of 1.8% in January. "Rising prices for food, alcohol and tobacco and cultural goods produced the largest upward contributions to change in the rate between January and February," the Office for National Statistics said.

As May’s divorce deal with the EU has been rejected by lawmakers twice already, US National Security Adviser, John Bolton, accused Britain's political establishment of failing to implement the result of the 2016 referendum to leave the European Union.

Sterling fell nearly 1% on March 20th after the prime minister asked the EU to delay Brexit until June 30th, a shorter extension than some in the market had been expecting and warned a no-deal Brexit was still possible.

Asian and European stocks mostly slid on March 20th, as investors eyed China-US trade talks and the Brexit saga, before the US Federal Reserve's interest rate call. “Brexit, as one of the markets' regular macro concerns, is weighing heavy on investors’ minds," noted Spreadex analyst, Connor Campbell.

All the firm's forecasts are based on London and Brussels reaching a deal for an orderly Brexit and the United States foregoing new import taxes on European cars. The German high-end carmaker, BMW, warned on March 20th it expects pre-tax profits "well below" 2018 levels this year as it announced a massive cost-cutting scheme aimed at saving 12 billion euros ($13.6 billion) in total by 2022. Toyota on March 20th said it will build a new hybrid car in Britain for Japanese peer Suzuki as the UK auto sector has been hit by Brexit uncertainty. "Seeking to produce additional volume for other customers is one example of all the efforts we are making to keep our UK manufacturing operations as competitive as they can be," in the face of Brexit, said Toyota's head of UK operations, Marvin Cooke.

Divisions in government

 "I don't want a long extension," May said on March 20th, warning that a longer delay would mean Britain having to take part in the European Parliament elections at the end of May. "The idea that three years after voting to leave the EU, the people of this country should be asked to elect a new set of MEPs is, I believe, unacceptable," she said. "As prime minister, I am not prepared to delay Brexit any further than June 30th," she added.

One source was reported as saying that the divisions at the top of British government made things feel, "like the last days of Rome." May's deputy, David Lidington, had warned that without a deal, "Seeking such a short and, critically, one-off extension would be downright reckless and completely at odds with the position that this House adopted."

Commons leader, Andrea Leadsom, a Brexit-supporting member of May's cabinet, admitted on March 20th there were "different views" among ministers on the way forward. A long delay to Britain's departure date from the European Union would not provide certainty, Education Secretary Damian Hinds said on March 20th, "I don't see how a long delay gives certainty. Actually, we've had a long time already... People are a bit tired of waiting for parliament to get our act together and get the deal passed," Hinds told BBC Radio.

In a biting op-ed in the euro-sceptic Daily Telegraph newspaper, Donald Trump Jr criticised the British premier's latest plan to request a delay to Brexit, saying it signalled, "that democracy in the UK is all but dead." "Mrs May ignored advice from my father and ultimately, a process that should have taken only a few short months has become a years-long stalemate, leaving the British people in limbo," Trump Jr stated.