The European Court of Justice just handed the UK a fire extinguisher.
The EU’s top court ruled that the UK could end Brexit without the agreement of the other 27 members of the bloc. The UK “is free to revoke unilaterally the notification of its intention to withdraw from the EU” and, importantly, not suffer any penalties to its status for doing so, the court said today. The decision confirms the opinion a senior ECJ official gave on the matter last week. The decision to rescind Brexit would have to be made by March 29, 2019.
Within hours, the UK fanned the flames even higher.
The process of quitting the EU is roiling the British government, which just abruptly called off a vote in parliament on prime minister Theresa May’s Brexit deal, scheduled for tomorrow night. Although it seemed all but certain the deal was going to be rejected by MPs, markets aren’t taking the uncertainty around the last-minute cancellation well.
While May has been trying to drum up support for her withdrawal agreement, she has said lawmakers face three options: her deal, no deal (widely expected to be an economic catastrophe), or no Brexit. Until very recently, the third option—calling off Brexit and remaining in the EU—seemed more like an outside threat, a denial of the public will after the 2016 referendum. Now, it’s become an increasingly viable alternative.
The ECJ ruling, and infighting between British ministers, has encouraged opponents of Brexit who have been calling for a second referendum. They argue that now it is known what Brexit would actually entail and parliament has reached an impasse, the British public should get to decide the course of action.
What happens next?
The UK parliament’s so-called “meaningful vote” on May’s deal had been scheduled for tomorrow night. That’s now been postponed, and the prime minister is due to give a statement in the House of Commons at 3:30pm local time to explain her reasoning.
Regardless, a vote will eventually need to happen. (And, in fact, a vote may need to be held to agree to postpone tomorrow’s vote, adding yet more uncertainty to the process.) Any Brexit deal between London and the EU has to be approved in the UK parliament before it’s voted on by the European parliament and ratified into law. If this doesn’t happen before March next year, when the UK is officially scheduled to leave the EU, then Britain needs to ramp up preparations for a “no deal” Brexit, the worst of all options.
As the parliamentary arithmetic currently stands, things look bad for May. She already lost three other votes in parliament last week on Brexit-related procedural issues, showing how few people she has on her side. There are many reasons MPs don’t like May’s deal, with Brexiteers seeing it as worse than remaining because it ties the UK to the EU indefinitely, and Remainers wary of the short- and long-term economic costs of a more definitive break with the UK’s largest trading partner.
At the time of writing, the pound dropped to its lowest level against the dollar in 18 months.
After a vote (whenever that may be), then what?
If the vote doesn’t go May’s way, it could result in a full-blown constitutional crisis. Here are some of the potential outcomes:
- Theresa May tries to renegotiate parts of deal—which the EU says is impossible—and brings it back to parliament for vote within 21 days.
- May is ousted as prime minister and replaced by another Conservative MP who has a very small amount of time to renegotiate a deal with a reluctant EU (see number 1).
- The UK leaves the EU without a deal.
- The opposition gains the support of enough fed-up members of the majority to force a snap general election.
- A second referendum is held, although what voters would decide on—Deal or no deal? Deal, no deal, or no Brexit?—is not clear.
Many of these options would require an extension of Article 50, which was activated by the UK and set the March 2019 deadline for the UK to leave the EU. If you’re trying to picture all these possibilities, here’s a flow chart from Berenberg, with a scary black hole in the middle.
Got it? No? Neither does anyone else.