Brexit Bulletin: The Last-Chance Saloon

(Bloomberg) -- Today in Brexit: A meeting in Brussels on Wednesday could hold the key to salvaging Theresa May’s much-maligned divorce deal.

Prime Minister Theresa May is running out of opportunities to convince the European Union to allow changes to her Brexit plan, raising the stakes as she heads back to Brussels for yet more negotiations.

With the clock ticking down to when May must next face Parliament, the British government sees her meeting with European Commission President Jean-Claude Juncker on Wednesday in Brussels as a crucial chance for progress, Bloomberg’s Jess Shankleman, Alex Morales and Tim Ross report. The question is whether she can secure legally binding changes to the so-called Irish border backstop, which has proved the biggest obstacle to getting a deal.

It won’t be easy. While May needs a quick agreement to keep Parliament from seizing control of the U.K.’s divorce by its Feb. 27 deadline, EU officials are playing down the prospects of an imminent breakthrough. They say the meeting is just a staging post in the resumption of talks. The mood on the European side is far gloomier than the one suggested by the British side, according to two officials. Juncker himself expressed his frustration at the state of talks on Tuesday, saying, “I’m losing my time with this Brexit.”

Brexit Bulletin: The Last-Chance Saloon

But it’s May who is up against the tightest time constraint. A U.K. official said the prime minister hopes to put a revised Brexit deal to a binding vote in Parliament before Feb. 27 — the date when lawmakers opposed to the U.K. leaving the bloc without an agreement would have the chance to take the process out of May’s hands.

In an effort to avoid that scenario, Attorney General Geoffrey Cox and Brexit Secretary Steve Barclay are also in Brussels on Wednesday for technical talks on the contentious backstop plan for avoiding a policed border with Ireland. The aim is to secure legally binding wording that reassures British lawmakers the U.K. won’t get stuck in the backstop arrangement, and therefore tied to EU rules, indefinitely.

May is still trying to persuade the EU to reopen the Withdrawal Agreement in order to do that, but the bloc has repeatedly ruled out such a move, a position it reiterated on Tuesday. While it could offer an annex to the existing text, which could be legally binding, the question is whether that is enough for some U.K. lawmakers.

“If it is not in the Withdrawal Agreement, it will not butter many parsnips,” Jacob Rees-Mogg, who heads the pre-Brexit European Research Group, said on Tuesday. The mood of the Brexiteers may be further soured by the fact that the so-called “Malthouse Compromise” — a policy they’d backed to solve the Irish-border tangle using new technology — is said to no longer be a serious contender. Still, pro-Brexit Conservatives, who met with May to push their case for the plan on Tuesday, insisted afterward that it remains “alive and kicking.”

Today’s Must-Reads

  • As lawmakers on all sides await May’s latest proposal, Tim Ross and Jess Shankleman explain why the booming baritone verdict of Geoffrey Cox could be crucial in deciding the fate of Brexit.
  • Bloomberg’s Silla Brush and Alexander Weber report how the City of London is getting a last-minute reprieve from EU nations as politicians seek to avert chaos in trading should Britain crash out of the bloc.
  • The Times reported last night that Joan Ryan has become the eighth Labour politician to resign and join the Independent Group — a move the lawmaker later confirmed on Twitter.

Brexit in Brief

Trade Pessimism | Business Secretary Greg Clark said the U.K. isn’t likely to reach agreements with Japan and South Korea to roll over existing trade deals before Britain’s scheduled departure on March 29. Clark also warned that a no-deal Brexit would be a “disaster” and a “hammer blow” to U.K. industry.

Labour Split | As Joan Ryan’s decision shows, the fallout from the Labour resignations is continuing. On Tuesday, members of the party leadership struck different notes as they called for unity, while Sky reports the party is considering plans to allow voters to force MPs from their seats if they quit. Meanwhile, here’s a look at what policies the newly independent lawmakers might support.

Farmer Protection | Speaking at the National Farmers’ Union conference, Environment Secretary Michael Gove pledged to protect British farmers and uphold food standards if the country leaves without a deal. Gove said the government would announce tariffs that would apply in the case of a no-deal Brexit “shortly.”

Drug Lawsuit | The lawyer behind a landmark ruling allowing the U.K. to change its mind on Brexit is planning a last-ditch challenge to the government’s plans for drug supplies if the country tumbles out of the EU without a deal.

Jobs Dichotomy | Figures Tuesday showing Britons are enjoying record employment are at odds with the list of companies saying they’re shutting down production in the U.K. With the threat of a chaotic Brexit hanging over the outlook, the question is how long the boom can last. 

Nordic Switch | Companies planning share sales are increasingly turning away from London and instead looking at Nasdaq’s Nordic markets, according to the New York-based exchange operator.

On the Markets | The pound rallied to a two-week high on Tuesday amid optimism that the Brexit stalemate could be ended before Parliament wrests control of the process next week. Still, Bloomberg’s Vassilis Karamanis suggests that options traders may be getting too fixated on the March 29 exit deadline.

Brexit Bulletin: The Last-Chance Saloon

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