Brexit Bulletin: It’s Not the 11th Hour Yet

(Bloomberg) -- Today in Brexit: Running down the clock is nothing new, but Theresa May takes it to new extremes. 

Theresa May might pull a vote on her deal, according to two of her ministers. If she does, it will be to set up the most dramatic move yet in her two-year Brexit poker game.

The prime minister had set Parliament a deadline: back the deal by March 20 or risk being forced into a long extension of European Union membership, and having to take part in European Parliament elections this spring. It was a move designed to get pro-Brexit hardliners to back her deal.

It doesn’t appear to have worked, at least not yet.

So why avoid another vote? May would then head to an EU leaders’ summit on Thursday without a deal. She could ask for an extension and be told only a long one would do, as a short grace period won’t be enough to find a new way forward. She would then return to Parliament – with less than a week until exit day – and present lawmakers with their starkest choice yet: Back my version of Brexit or be trapped in the EU for another year, or even forever.

The no-deal Brexit that hardliners want has been taken off the table, so the choice is now May’s deal or no Brexit. That’s the strategy anyway.

But will it work? Former Foreign Secretary Boris Johnson came out strongly against May’s deal again last night. And the threat of European elections might not scare the Brexiteers as much as it worries the EU: it would be a chance for pro-Brexit parties to sweep to victory on the back of the popular frustration at the way the divorce has been handled.

The hardliners have spent their careers battling the establishment – the risk is they like the fight more than what they’re fighting for.

Today’s Must-Reads

• Last week’s vote against a second referendum doesn’t settle the matter, writes the Bloomberg Editorial Board.
• A long Brexit delay is bad news for the bloc, argues Wolfgang Munchau in the Financial Times. “The EU cannot fight more than one big crisis at a time and it faces several threats.” 
• ICYMI: The inside story of one of May’s worst weeks – when she lost her voice, her Brexit vote and almost lost control.

Brexit in Brief

Corbyn Undecided | Labour leader Jeremy Corbyn said he could vote to leave the EU if there were a second referendum with a “good deal” on the table. He told Sky’s Sophy Ridge that his hypothetical vote would “depend on the choice in front of us.” Labour hasn’t decided whether to back an amendment (known as Kyle-Wilson) that calls for lawmakers to back May’s deal on the condition it then goes to a public vote, in which the alternative would be remaining in the bloc.

Under Pressure | Northern Irish farmers are urging the Democratic Unionist Party to back the deal, the Financial Times reports. Still, there’s no guarantee the famously stubborn party is listening.

A Steeper Cliff-Edge | A draft document discussed by ambassadors on Friday opens the door to the long extension May and her team are dangling before Brexiteers – but if elections haven’t been held, the U.K. will be ejected from the club in July, with no way back.

London Falling | Asking prices for London homes fell as buyers hesitate with political turmoil in the air. “Buying activity remains cooler than usual,” said Miles Shipside, director at Rightmove. “There’s greater resilience the further away you get from the London market.”

Yellow Vests Return | Shops on the Champs Elysées were torched and 200 people were arrested on Saturday in a renewed burst of violence by Yellow Vest protesters. That puts French President Emmanuel Macron back in crisis-fighting mode at perhaps the worst time for Theresa May.

Investment Plunges | Business investment in the United Kingdom is forecast to decline by 1 percent this year due to uncertainty over Brexit, according to the British Chamber of Commerce. That would be the weakest reading since the financial crisis in 2009.

On the Markets | Pressure on the pound should ease as the threat of no-deal recedes, Bloomberg’s John Ainger writes. “If you saw a long extension, then you could see the pound rally a little bit,” said Mike Bell, a money manager at JPMorgan Asset Management. “If you see the deal actually approved in the next couple of weeks – and a short extension to back that up – then you can see sterling north of $1.35.”

Respectful Ridicule | Dutch Prime Minister Mark Rutte lauded May’s tenacity on Sunday – by comparing her to a Monty Python character. “I have a lot of respect for Theresa May – she reminds me occasionally of that Monty Python character where all his arms and legs are cut off and then says to his opponent: Let’s call it a draw.” 

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To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Jones Hayden

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