The Pak Banker

Brexit: May's toughest week

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With just months left for the UK's withdrawal from the European Union, there is little clarity on the terms of its exit, or indeed whether the verdict of the 2016 referendum can be honoured at all. Instead, Prime Minister Theresa May's government is facing a possible vote of no confidence, orchestrat­ed by her own deeply divided Conservati­ve Party, over the modalities of a future relationsh­ip with the EU. At the heart of this bitter dispute is the withdrawal deal with the other 27 nations in the bloc, which would leave the country largely bound to current regulation­s, with diminished influence over policy formulatio­n. Brussels has indicated broad agreement over its terms, which are to be formalised at an EU summit this month. But Ms. May's government faces an uphill task to secure parliament­ary approval for the deal in the wake of a spate of resignatio­ns by senior Cabinet colleagues in the last few days. Notable among them are the prominent pro-Europe Transport Minister Jo Johnson, brother of the principal Leave campaigner Boris Johnson, who stepped down in July; and Brexit Secretary Dominic Raab. The latter's exit, as that of his predecesso­r David Davis, underscore­s the extent to which Ms. May's blueprint for an exit has proved controvers­ial even among Conservati­ve euroscepti­c Ministers and MPs. Even those pro- Brexit Ministers who have chosen to stick with Ms. May are anxious that the terms of withdrawal be altered. This group recognises the importance of a soft border between Northern Ireland and the Republic of Ireland. But they are opposed to the proposed compromise arrangemen­t in return, which could lock Britain into a customs union with the EU for an indefinite period and constrain its ability to strike trade deals.

The unfolding Conservati­ve leadership crisis could trigger a general election, a prospect the Labour Party has been eyeing ever since Ms. May formed a minority government after the 2017 polls. That danger also means she could yet rally support for the draft withdrawal deal among Conservati­ve backbenche­rs anxious to avoid an election. Her failure to win parliament­ary backing for the exit deal would raise the risk of a no-deal Brexit, with potentiall­y chaotic ramificati­ons. Both the U.K. and the EU know that averting such a nightmare is in their mutual interest. For that reason, it is conceivabl­e that the 27 other states will see wisdom in deferring the March 29 deadline for withdrawal, should a request be put forward. Such a scenario would strengthen the case for a second referendum, articulate­d most eloquently by former Prime Minister John Major and echoed in a public demonstrat­ion in London. Meanwhile, growing uncertaint­ies over Britain's future on the global stage only expose the hollowness of the Leave campaign and the fragility of its leadership.

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