(Bloomberg) -- Pushing back the date when the U.K. leaves the European Union would be the “best outcome” in the divorce process, Citigroup chief global political analyst Tina Fordham said, as Prime Minister Theresa May faced almost certain defeat in a key Parliament vote Tuesday evening.
British lawmakers are set to vote on the Withdrawal Agreement that May negotiated with the EU, starting around 7 p.m. in London. If May’s deal is rejected, as is widely expected, then an extension of the Brexit negotiating period under Article 50 of the EU Treaty could give the prime minister time to take another shot at persuading MPs to support the agreement.
“My view is that the best outcome politically for the short term, as well as for markets by the way, is an extension of Article 50,” Fordham said in an interview with Bloomberg Television on Tuesday. “But bear in mind the prime minister probably has to ask for that and the EU27 have to support it. But it’s just getting too close for comfort,” she said.
If she loses the vote, “rather than allowing the prime minister to bring back her deal for a vote in what Americans might recognize as a TARP-2 scenario, she’s actually got to put forward a Plan B by Monday,” Fordham said. “So that really curtails her room for maneuver, and also that of Brussels.”
Officials from both sides dealing with the Brexit process are assuming that the exit date will be pushed back from the planned March 29 if May’s deal is defeated tonight, according to people familiar with the matter. Such a postponement would keep the U.K. from crashing out of the bloc without an accord.
“Bear in mind, the clock is ticking, the drums are beating, and March 29 the U.K. leaves whether it has a deal agreed or not, unless we get an extension of Article 50,” Fordham said.
“People who believe in Brexit are determined to pursue that outcome, it appears even if there are significant costs,” she said. “But nobody knows what those costs will be.”
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