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Restricting options, May attempts to force a choice on Brexit

British Prime Minister May's best ally in her fight to gain Parliament approval for her Brexit deal is the lack options.

Ms May has refused to extend the Article 50 date of March 29th. She warned that a second referendum would cause "irreparable damage" to the country's politics.  A "Norway-style" economic partnership or Canadian model trade agreement are fantasies unless the March date is delayed indefinitely. Each would require months of negotiation between May's government and the EU Commission. 

There are two choices, Ms May's negotiated exit, or a no-deal Brexit. The Democratic Unionists of Northern Ireland have said they will not support the deal in its current form. But if the deal fails in the Commons they will surely get an enforced border between the two Irelands.  If the Brexiteers and Labour push the deal to a defeat and the UK suffers disruption, recession and hardship in a chaotic departure, they will pay at the ballot box for their advocacy and careless execution. 

The EU Commission, despite its bravado about not remediating the terms, knows that a no-deal Brexit would cause a recession on the continent.

The commissioners in Berlaymont, their emblematic headquarters in Brussels, devoted to the idea of a European federal unionmay be insouciant but their political leaders are not.

Emmanuel Macron in France and Angela Merkel and her potential successors in Germany have forgotten their European history. They are learning what Luigi Di Maio and Matteo Salvini of Italy already know. In a failing economy, the electorate will obtain change from their national leaders or they will change their leaders. Recession will be blamed on the EU not Britain.  

When the options are so unpalatable, people and governments will cast around in hope until the last minute.  

If Ms May can keep the choices limited to her deal or no-deal she has a chance of winning by a sort of negative default. 

Author

Joseph Trevisani

Joseph Trevisani began his thirty-year career in the financial markets at Credit Suisse in New York and Singapore where he worked for 12 years as an interbank currency trader and trading desk manager.

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