Brexit Bulletin: Will the U.K. Ever Leave?

(Bloomberg) -- Today in Brexit: Britain looks set to remain stuck in the bloc it voted to leave in 2016 for a whole lot longer.

There are few signs of progress in last-ditch compromise talks between Theresa May’s government and Jeremy Corbyn’s Labour opposition.

Prime Minister May will probably go to Brussels for a key summit next week with little to offer her fellow European Union leaders about how she will break the domestic deadlock. EU officials have been saying for some time that a long extension is the most likely option, but even to get that May needs to show a possible path ahead. Will cross-party talks count as a big enough change in direction?

Bloomberg reported last night that May is in a battle with her own ministers to keep open the possibility of a second referendum—something she has long rejected but that’s wanted by at least some on the Labour side. May is facing a backlash from pro-Brexit ministers in her government, Tim Ross reports, who are horrified by the idea of putting the Europe question back to the public.

May probably needs an open mind in order to keep talks with her opponents going. Labour has its own splits on the issue of a second referendum and Corbyn himself has been among the most reluctant to embrace the idea. But entertaining it might also be useful as she heads to Brussels next week—a referendum that would allow the U.K. to change its mind has long been one of the EU’s favored outcomes, and officials consider it a watertight justification for an extension.

EU Council President Donald Tusk is proposing to offer the U.K. a 12-month extension to membership, with the option of leaving earlier if the divorce deal gets ratified, the BBC reports.

Officials on both sides have been floating this idea for a while as it gives the U.K. the option of preparing for EU elections on May 23—which the government does not want to take part in—but pulling back if a deal is passed in time.

But after two years of watching one deadline give way to the next, does anyone really believe Britain will meet this one?

Today’s Must-Reads

• The EU may be tempted to “be rid of this impossible, even unhinged, country” and should offer a long extension in return for a U.K. rethink, Martin Wolf writes in the Financial Times.
• A Scottish judge at the EU General Court tells Bloomberg’s Stephanie Bodoni how he laments the Brexit limbo.

Brexit in Brief

No-Deal Bill Delayed | A bill aimed at forcing the government to seek an extension to avoid a no-deal, which raced through the House of Commons on Wednesday, got held up in the House of Lords on Thursday. Debate will resume Monday. 

Georgia’s Opportunity | Georgia’s new president says her country must seize the opportunity presented by Brexit to push its case for integration and then EU membership. “We are looking at this situation with the determination to get the most out of it,” Salome Zourabichvili said in an interview in the capital, Tbilisi.

(Another) Brexit Price Hike | Europe’s ethanol market is getting a surprise boost from Brexit. Prices for the key ingredient in products from biofuel to antiseptic wipes have rebounded almost 30 percent since October, as the lack of clarity on Brexit trade tariffs sidelined traders, according to Joachim Lutz, the chief executive officer of CropEnergies AG, Europe’s largest ethanol producer.

On the Markets | The pound has edged higher on talks between May and Corbyn, as well as Parliament’s vote to block no-deal. But fund managers are still unconvinced, and it will take a decisive announcement on a Brexit deal and extension to inspire them to go all in, reports Charlotte Ryan. Sterling crept up to $1.3111 on Friday.

Just Get Out | Attorney General Geoffrey Cox, an influential Brexit-backer, said leaving the EU matters more than the terms of the future relationship, indicating a willingness to compromise. “We must use any lawful means to secure the ends” in achieving Brexit, he told the BBC’s Nick Robinson. Cox also said he’s “increasingly fatigued” by the stresses of his job, and he’s reading poetry to help. He said he keeps thinking of the Yeats line, “That is no country for old men.”

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

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