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Brexit Bulletin: Pleading for Time

Brexit Bulletin: Pleading for Time

(Bloomberg) -- Today in Brexit:  Theresa May is seeking a lifeline from France and Germany as opposition at home appears to harden.

With her attempts to reach a Brexit compromise meeting resistance from both sides of the political divide in the U.K., Theresa May is heading to Europe in search of more sympathetic ears.

May will hold talks with German Chancellor Angela Merkel and French President Emmanuel Macron on Tuesday as part of efforts to secure another short Brexit extension at a crunch summit this week. Meanwhile, in the U.K., negotiations will resume between the government and Labour, after four days of exchanges failed to unlock the agreement that the prime minister will probably need to get a Brexit deal through Parliament.

The opposition party wants a commitment that the government—and whoever succeeds May—will seek a customs union with the European Union, but Jeremy Corbyn complained last night that while the talks have been “serious,” the prime minister has “not yet moved off her red lines.”

May’s decision to even sit down with Labour is too much for some Tories, who are reigniting a plan to throw her overboard. Because they failed to oust her in December, their constitution forbids them from trying again for a year, but some MPs want to try anyway. One, Mark Francois, on Monday demanded that Conservative MPs be given a chance to vote on May’s position on Wednesday.

As U.K. lawmakers bicker, EU leaders are zeroing in on the offer they will make to the U.K. this week.  As Bloomberg’s Ian Wishart reports, diplomats are said to be settling on the idea of forcing Britain to take part in European elections on May 23, and offering an extension to negotiations of up to a year. The U.K. government yesterday confirmed that plans for those elections are being put in place—provoking yet more outrage from Tories.

“All over the country there is a firestorm that we might be involved in these European elections,” Conservative MP Bill Cash told Parliament. He said May’s policy was “subjugation to the European Union by crawling on our hands and knees as a government to the European Council.”

There may be other conditions attached to a delay, with some in the bloc pushing for commitments from May that she—and any successor—wouldn’t try to disrupt EU business. Leaders from countries most affected by Brexit are planning a “coordination” meeting Wednesday afternoon in Brussels, shortly before the start of an EU summit where all 27 will make a decision on the extension.

Meanwhile, the U.K. Parliament passed a law late on Monday designed to prevent the government from pursuing a no-deal Brexit. That sets up a vote on Tuesday or Wednesday where MPs will try to mandate May to seek a longer extension than she wants.

Today’s Must-Reads

  • Good cop/bad cop: Merkel and Macron are coordinating their moves every step of the way to keep control of Brexit, Bloomberg’s Ian Wishart and Helene Fouquet report.
  • Theresa May plans to give MPs a free vote on a potential second referendum in an effort to break an impasse in negotiations with Labour, according to the Telegraph.
  • A lack of progress in Brexit talks could hurt the Tories at local elections next month, says Lord Hayward, a Conservative peer and former MP. 

Brexit in Brief

LSE Planning | London Stock Exchange Group’s Turquoise venue is pressing ahead with plans to shift trading of European stocks to its Amsterdam operation.

Backstop Hint | Speaking in Dublin Monday, Chief EU negotiator Michel Barnier said the bloc wouldn’t start trade talks with the U.K. in the event of a no-deal Brexit until an agreement was reached on the Irish border. That means the U.K. has to find a way to keep the border open if it wants a trade deal, and the only way found so far is the backstop.

Wary Shoppers | Consumer spending declined in March as concern over Brexit made shoppers hold back on bigger purchases, according to the British Retail Consortium.  The month marked a “truly disappointing end to the first quarter” for retailers, according to Helen Dickinson, chief executive of the BRC.

Irish Warning | Ireland’s central bank has written to 53 U.K. mutual funds warning they will lose the right to sell access to their funds in the nation and the EU after the U.K. becomes a so-called third country outside the bloc. 

Market Calm | Pound traders appear undaunted by the lack of Brexit clarity, Bloomberg’s Charlotte Ryan reports. The U.K. currency edged higher on Monday, while a gauge of expected short-term sterling volatility is near a two-week low.

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To contact the editor responsible for this story: Anne Pollak at apollak@bloomberg.net, Leila TahaTimothy Coulter "Tim"

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