Brexit Bulletin: The Nightmare Deadline

(Bloomberg) -- Today in Brexit: It’s getting harder and harder to say when Brexit is going to happen—or if it ever will.

It was after the witching hour on a cool Brussels night when the EU offered Theresa May a new route away from the nightmare of no deal. The solution? A Halloween Brexit.

The British prime minister who can’t get her Brexit plans through Parliament went to Brussels, just two days before a second Brexit deadline, to ask 27 other leaders for a new delay.

May’s pitch went more smoothly than on previous occasions, but the real haggling started when she left the room for her now-traditional solo dinner. Inside the council chamber, French President Emmanuel Macron was talking tough. He opposed plans to offer the U.K. a yearlong delay or an extension until the end of this year. Only a short extension would be in the best interests of the EU, Macron said.

“Everything after June 30 makes the EU vulnerable,” Macron said in the chamber, according to an official who was briefed by a leader in the room. As he spoke, he placed his hand on his heart.

The wrangling took hours (here’s the blow-by-blow in case you missed it), but in the end a very Brussels-style compromise was reached. The new Brexit deadline would be Oct. 31, with an opportunity for review in June. As is now traditional, EU Council President Donald Tusk sent out a puff of white smoke on Twitter. Actually, he had to do it twice.

So Brexit is now on course for a six-month extension, but does that keep anyone happy? May wanted a short delay to help get her deal through Parliament. Six months might not be long enough for major changes in the U.K.’s febrile politics, such as choosing a new Brexit path, a new Tory leader to succeed May or even a new referendum.

And the new deadline would just take us back to where we’ve already been:  If the U.K. can’t agree on a way forward, the options will be a no-deal Brexit, revoking Brexit entirely or a new extension request.

Voters, politicians, businesses and traders have been waiting for almost three years to find out what Brexit will look like. On the day scientists in Brussels revealed an image of a giant black hole 55 million light-years away from Earth, are we any closer to a clear picture of Britain’s EU withdrawal?

Today’s Must-Reads

• Macron got on everyone’s nerves and ended up isolated. Bloomberg’s Viktoria Dendrinou, Milda Seputyte and Helene Fouquet have the essential account of the long night in Brussels.
• Brexit has shown that referendums are basically mob rule and there are better ways to do democracy, writes Peter Coy in Bloomberg Businessweek.  
• In praise of Mark Francois: If only every MP fought for Britain like the pugnacious Brexiteer, the nation would be in a much better place, Charlotte Gill argues in the Telegraph.

Brexit in Brief

Customs Olive Branch | The U.K. shouldn’t be a “silent partner” in any future customs union with the European Union, Irish Prime Minister Leo Varadkar said, adding that Britain could be granted a say in the bloc’s future trade policy. All very constructive, with just one problem (for Theresa May): A customs union is the official policy of Jeremy Corbyn’s opposition Labour Party, not her Conservatives. Corbyn didn’t let the comments pass unnoticed. 

How to Reverse Brexit | Greek Prime Minister Alexis Tsipras, who walked back from a referendum result at home in 2015, asked leaders whether they should consider backing a course of action that drives the U.K. towards holding EU elections in late May. That would be “the greatest defeat of Brexiteers, and maybe even the beginning of the end for Brexit,” Tsipras told his counterparts. 

Looking Up | The U.K. economy is on course for a stronger-than-forecast first quarter, figures released yesterday showed. Some growth may be due to Brexit stockpiling, but a projected first-quarter expansion of 0.5 percent is still more than double the pace of the previous three months and faster than the Bank of England expects.

Brexit ‘Is Not Lehman’ | Meanwhile, in Washington: “The core of the financial system is ready for Brexit,” Bank of England Governor Mark Carney said at a panel discussion. “It bears no resemblance to Lehman, in terms of the degree of preparation,” he said. “We learned from that experience.”

Santander | Banco Santander is planning to move about 30 employees to Spain from its British investment bank if the U.K. leaves without a deal, a person familiar with its plans said.

Delaying Tactics | Veteran euroskeptic MP Bill Cash isn’t happy with the prospect of another Brexit delay. He’s written to Tusk to let him know that a long extension is “likely” to be challenged in the British courts. 

Feeling Blue | Before the leaders settled down to their serious business, there was a moment of apparently genuine levity between May and German Chancellor Angela Merkel. The two women—both dressed in blue jackets—shared a hearty laugh as they peered at an iPad. The reason? They were looking at an image showing them side-by-side wearing those jackets as they took questions in their respective parliaments earlier in the day.

On the Markets | The new deadline may give the U.K. markets a reprieve, says John Authers. The pound was little changed at $1.3088 as of 7:15 a.m. in London. 

Want to keep up with Brexit?

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To contact the editor responsible for this story: Anne Pollak at apollak@bloomberg.net, Leila Taha

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