EU calls Brexit emergency summit after UK MPs reject Theresa May deal again

by Samuel Abasi Last updated on April 2nd, 2019,

The European Union has called a special summit for April 10 to assess the third rejection in the UK parliament of the Brexit withdrawal agreement and says a chaotic exit for Britain from the bloc “is now a likely scenario.”

The EU had been hoping for a positive outcome of Friday’s Brexit vote in the House of Commons, which would have paved the way for Britain to leave on May 22.

Instead, all options are now on the table, including delaying Brexit for a long time.

The EU expects British Prime Minister Theresa May to be part of that April 10 summit.

An EU Commission official says the 27 remaining EU nations are now “fully prepared for a no-deal scenario at midnight 12th of April,” by which time the UK must chart a course ahead.

“The Commission regrets the negative vote in the House of Commons today,” it said in a statement, adding that the EU has given London until April 12 to inform it of the next steps. “It will be for the UK to indicate the way forward before that date.”

“A ‘no-deal’ scenario on 12 April is now a likely scenario. The EU… is now fully prepared for a ‘no-deal’ scenario at midnight on 12 April.”

The Commission also said divorce terms without the failed Withdrawal Agreement would be much worse.

“The benefits of the Withdrawal Agreement, including a transition period, will in no circumstances be replicated in a ‘no-deal’ scenario. Sectoral mini-deals are not an option,” it said.

British lawmakers have rejected the government’s divorce deal with the European Union for a third time, leaving the date and terms of the U.K.’s departure from the bloc uncertain.

The House of Commons voted 286-344 against the withdrawal agreement struck between Prime Minister Theresa May and the EU.

It follows defeats by even wider margins in January and March, and leaves the government’s blueprint for exiting the bloc in tatters.

Britain now has until April 12 to tell the EU what it plans to do next. It must either cancel Brexit, seek a longer delay or crash out of the bloc without a deal.

U.K. lawmakers plan to hold a series of votes Monday in an attempt to find a new plan.

British Prime Minister Theresa May says the implications of the lawmaker’s rejection of her European Union divorce deal are “grave.”

Speaking Friday after Parliament voted down her deal, May told lawmakers that it should be a “matter of profound regret” that “once again we have been unable to support leaving the European Union in an orderly fashion.”

She says “the implications of the House’s decision are grave.”

The decision leaves Britain’s departure up in the air. The legal default would be to leave the bloc without a divorce deal on April 12, although Parliament would not allow that.

U.K. Prime Minister Theresa May issued a veiled threat to dissolve Parliament and call a general election, after politicians rejected her Brexit deal for a third time.

“I fear we are reaching the limits of this process in this House,” May told the Commons after her deal was rejected by 344 votes to 286 on Friday.

“This House has rejected no deal,” she said. “It has rejected no Brexit. On Wednesday, it rejected all the variations of the deal on the table. And today it has rejected approving the Withdrawal Agreement alone and continuing a process on the future.”

May has previously said an election is the last thing the country wants. Her spokesman would not go that far on Friday, insisting only that a national vote is not in Britain’s best interests.

But just because May and her team would much prefer to avoid a general election, they clearly can’t rule one out.

The next stage is for the government to wait for members of Parliament to work out their own preferences in a series of votes on Plan B options on Monday. That could provide a Brexit plan that Parliament will support. Then the government will seek to negotiate the next stage of that with the EU in talks that need to begin by April 12, according to government officials.

The pound has fallen after British lawmakers once again defeated Prime Minister Theresa May’s Brexit deal with the European Union.

Having traded modestly higher ahead of the vote, the pound was 0.5 percent lower at $1.2995 soon after the lawmakers voted by a margin of 58 votes against May’s withdrawal agreement.

The defeat means that the United Kingdom now facies the prospect of crashing out of the EU on April 12 without a deal that could lead to severe disruptions to trade.

Lawmakers will have another chance on Monday to come up with their own proposals of how, or if, Britain leaves the EU. There’s also the prospect that Britain will agree on a long Brexit extension with the EU.

David Cheetham, chief market analyst at XTB, said Britain is “in danger of sleepwalking into an unintended ‘no-deal’ scenario,” and that “poses a major risk for the pound.”

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