Brexit Bulletin: To the Brink Together

(Bloomberg) -- Today in Brexit: An overheard conversation in a bar might have rumbled the premier’s plan. 

Theresa May is pushing Brexit talks to the brink, and the European Union is backing the same strategy.

A European leaders’ summit scheduled for March 21 — just a week before Britain is due to leave — is the most likely chance for May to win a last-minute concession, Tim Ross and Ian Wishart report. The bloc doesn’t want to offer anything sooner in case the U.K. rejects it and asks for more. With the exit deadline looming, May would then take the revised accord back to Parliament, telling lawmakers her deal is the only one on offer. EU officials believe that’s the best chance of getting it over the line.

May once again asked the House of Commons on Tuesday to give her more time to negotiate terms, and she also set out plans to bypass parliamentary procedure to rush legislation through in the days before March 29. She faced accusations she’s deliberately trying to run down the clock so she can blackmail Parliament into backing her blueprint to avoid a no-deal departure.

But on Tuesday an alternative blackmail tactic emerged when May’s chief negotiator, Olly Robbins, was overheard by an ITV reporter in a Brussels bar. Robbins suggested that the strategy would be to tell the Commons in the last week of March that if an amended version of the government’s deal wasn’t passed, Brexit would have to be postponed, potentially for a long time, ITV reported. That would concentrate the minds of pro-Brexit members of Parliament who might prefer some kind of divorce rather than risk the whole thing being overturned by an extension. (It also fits with May’s mantra that the choice is her deal, no deal or no Brexit.)

May’s brinkmanship has long worried business. But it’s also freaking out members of the government and May’s party. Some government officials think it’s too risky and must be stopped. Keith Simpson, a usually loyal Conservative, was among those condemning her tactics. “It’s a high-wire act and - gulp - might lead to a no-deal,” Simpson said. 

Today’s Must-Reads

• Deal or no-deal, Labour and Conservatives will split over Brexit, argues Rafael Behr in the Guardian. 
• Corbyn might just become May’s unlikely Brexit saviour, argues Bloomberg Opinion’s Therese Raphael.
• Do you know what WTO-terms Brexit really means? How about the Brexiteers’ much-loved Article 24? It’s all explained here in a Bloomberg Quicktake.

Brexit in Brief

Cooper-Boles Is Back | A cross-party group of British MPs has published a draft law that would seek to delay Brexit if there’s no deal by mid-March. The members of Parliament, led by Labour’s Yvette Cooper, said they’ll take steps to put their plan into action on Feb. 27 if May doesn’t have a revised deal by then. Backers include Caroline Spelman, Oliver Letwin, Nick Boles and Dominic Grieve, all members of May’s Conservative Party.

Keeping the Trains Running | The EU has a plan to keep the Channel Tunnel open in a no-deal Brexit. There’s a catch though: The U.K. must maintain existing EU safety standards and comply with EU rules such as those covering train-driver licenses. It follows measures the bloc has taken in key areas such as finance and aviation – sectors where the EU would stand to lose if there’s no deal. They aren’t taking steps to ease cross-border trade of goods, and the European Commission has told member states not to do anything that would make no-deal too easy for the U.K. 

MI6 Chief to Stay | The head of MI6 is expected to put off retirement so he can guide the service through Brexit, the Times reports.

Latest Idea | The U.K.’s latest tactic to get changes to the much-hated Irish backstop in the Brexit deal is to convince the EU that it can only be temporary by its own rules, Ian Wishart reports. “Article 50 under the European treaty says that it must be temporary, and yet the advice from the U.K. attorney general sets out a concern that it could be indefinite,” Brexit Secretary Steve Barclay told reporters. This is “the key issue.” Sounds a bit like a semantic argument rather than a pitch for a wholesale redrafting. 

Stop the Clock | Cyprus Finance Minister Harris Georgiades called on the U.K. and the EU to postpone Brexit, saying a request for a “small extension” of the process would be acceptable to the other EU nations. “Exiting without a deal is really unthinkable.” On Monday, Malta’s finance minister said no-deal would be like an “atomic bomb.”

The Cost of Brexit | Bank of England Governor Mark Carney said weak growth figures in the last quarter underscore the need for certainty on Brexit. Growth slowed to the weakest in six years as investment fell. 

Germany Inc. Isn’t Ready | Many German firms aren’t ready for Brexit, Bundesbank executive board member Joachim Wuermeling told Handelsblatt. "Financial supervisors and banks have made great efforts to prepare for a tough Brexit," however, "I am worried that many corporate clients of the institutions have so far only insufficiently dealt with the consequences of Brexit for their financial transactions."

Moving to Austria | Brexit helped double the number of U.K. companies setting up shop in Austria, according to government statistics. The number expanding through projects in Austria rose to 14 last year from seven the year before. They included the London-based FDM Group Holdings, a consultant that hired 75 new workers in the Austrian capital.

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

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