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COMMENTARY

Halloween Brexit extension - more 'trick' than 'treat'?

THE House of Commons began a two-week recess on Monday after the latest Brexit extension to Oct 31 was agreed upon last week . While many MPs have welcomed the new Halloween deadline, it represents a classic Brussels fudge that may be more 'trick' than 'treat' for London and potentially the EU too.

This is because the compromise six-month flex-tension, rather than a longer one of potentially a year (favoured by a large majority of EU countries, including Germany), or a shorter one to May or June (favoured by France), may not deliver the decisive breakthrough needed.

That is, six months may be too short to allow a fundamental re-think on Brexit, including the possibility of a second referendum or People's Vote, but is long enough to potentially take off the short-term pressure on MPs to agree to a withdrawal deal before the European Parliament elections begin on May 23, as the government favours.

Moreover, with European Council president Donald Tusk having said that the EU will potentially consider another extension beyond October, there remains a possibility that the Oct 17 European summit could kick the Brexit question out till 2020. Here the next potential deadline could be March 31, 2020 given that the April 2020 summit will set the EU's 2021-2027 budgets.

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The differences between EU states on the latest Brexit deadline underlines the sometimes forgotten point that each nation has distinctive political, and economic interests that informs its stance on the UK's exit.

Thus, while the EU-27 have been remarkably unified to date in negotiations with London, their positions do vary according to factors such as trade ties and patterns of migration with the United Kingdom, domestic election pressures, and levels of eurosceptical support within their populaces.

The divergent positions of EU states thus range from the UK's fellow non-eurozone member, Sweden, whose political and economic interests are broadly aligned with UK positions, to countries that have more complicated postures, including France. It is no coincidence that Emmanuel Macron had the toughest stance towards the Brexit extension.

Paris has long had a complex, sometimes contradictory relationship with London in the context of EU affairs. And the positioning of the ardently pro-Brussels Mr Macron, who believes Brexit to be an act of political vandalism to the continent, is reinforced by the domestic pressure he is under to be seen to be tough on London.

RIVALRY

This is not least because of the continuing political appeal of populists such as far-right National Front Leader Marine Le Pen (Donald Trump's favoured candidate in the 2016 French presidential elections). And the fears Mr Macron has that such eurosceptic candidates could potentially make massive gains in Theresa May's European Parliament ballots.

These political factors are reinforced by broader French economic plans to tout Paris as a competing financial centre to London which began in earnest under the presidency of Francois Hollande. This has continued under Mr Macron and in 2017 he hailed the decision to relocate the European Banking Agency (EBA) to Paris from London as "recognition of France's attractiveness and European commitment".

French officials hope that the EBA's relocation will help bring many thousands of UK banking jobs to Paris. The French capital is competing post-Brexit with other financial centres, including Frankfurt, for UK financial jobs with many on the continent asserting that London cannot now remain the main euro-denominated financial clearing centre.

With France at odds with traditional ally Germany over the Brexit extension date, a classic Brussels fudge therefore emerged of Oct 31. Mr Macron also secured a June "review" to provide assurances that the United Kingdom will now conduct European Parliament elections.

In this tricky context, Prime Minister Theresa May now has only a very short respite over Easter before she will be under intense pressure again. There is now fast growing pressure within the Tory Party to oust her, especially because many of her backbench MPs believe she has reneged on a previous pledge not to entertain a Brexit delay beyond June 30.

In this context, many Conservative MPs want to see a new leadership election start this Spring that would bring in a new party leader by early Autumn at latest followed by a potential general election.

However, Mrs May could yet dig in and stand by her current line that she wants to stay prime minister until phase one of Brexit - the withdrawal deal - is agreed.

Given that Mrs May cannot technically face a formal leadership challenge until December, after the last one failed just before Christmas, MPs are therefore looking for other ways to depose her. While this could come quickly if the cabinet turns against her, one other option could come with the end of the parliamentary session later this year.

The end of the parliamentary session will trigger a review of the government's confidence and supply agreement with the Northern Irish Democratic Unionist Party (DUP). This was struck after the 2017 election in which the Tories lost their overall majority.

With the DUP still opposed to Mrs May's Brexit withdrawal deal, as it stands, the party may not be able to issue another guarantee to support her government. Yet the ability to win a Commons vote approving a Queen's Speech, which traditionally kicks off a new parliamentary session, is a necessary condition for a viable government.

OPTIONS

With time potentially running out, Mrs May must therefore now decide in coming days how best to move the Brexit debate forward. With her own withdrawal deal potentially dead, there appear two main immediate term options: continuing the current cross party talks, or a further round of indicative votes, albeit potentially this time on a preferential 'knock-out' basis to try to forge a parliamentary compromise.

Neither of these two options, however, are appealing for Mrs May as she could well be forced to compromise on one of her previous 'red-lines'. This includes the United Kingdom remaining in a customs union with the EU which would further antagonise much of her Conservative Party base.

Taken overall, the Halloween extension has given Mrs May only very limited breathing space and could come back to haunt her. She will be under intense pressure again soon with growing Conservative Party momentum for a leadership contest that could enable a general election later in 2019.

  • The writer is an associate at LSE IDEAS at the London School of Economics