February 21, 2019
Not a lot happened in the UK yesterday - not really. We think it is best to ignore the new centrist party because it will not affect Brexit one way or the other, nor do we see any evidence of a groundswell of public support. When one of the new Conservative members of the now 11-strong independent group used the occasion to emphasise her support for fiscal austerity, politics as usual returned. The honeymoon period - or rather the mourning period - ended on the second day of this new group.
After the three defections, the effective Conservative majority is now 323 to 318 votes. Dominic Grieve, the former attorney general, said last night that he too would resign from the Tories, but only if the government proposes to leave the EU with no deal.
If that were the case, he would not be the only one. So one of the firmer conclusions we draw immediately is that, if the Tories wanted to pursue a no-deal Brexit, they would need to have elections first. The reverse order makes no sense - elections in the middle of no-deal chaos.
So, where are we now? Theresa May's visit to Brussels yesterday yielded no concrete results - unsurprisingly. The technical talks will continue, but no agreement is expected by next week. The Sun reports that ministers want May to commit to an extension in case of no deal, or else she will see ministers supporting the Cooper amendment. We think this is a promise she can easily give. The Cooper amendment might still pass, as there is more support for it now than three weeks ago. But the amendment has lost much of its political significance. Back then, it was regarded as a proxy for a second referendum. This is no longer so.
Here are our three main Brexit scenarios:
What about the Cooper bill? If the meaningful vote is lost, it would force the government to make an official request to extend the Art. 50 deadline (preceded by a symbolic vote on whether the parliament actively supports a no-deal Brexit). It is possible that EU and UK agree a different period than the one specified in the bill. The EU is also free to attach conditions.
Does the government have the ability to frustrate the Cooper bill? The bill is well-drafted and has no obvious loopholes. But it is not a fail-safe mechanism either. The government could:
It will probably not come to any of this, but this list may still constitute a useful warning to anybody who believes that Cooper is a fail-safe mechanism towards a Brexit reversal or a second referendum.
We also have stories on the high demand for eurozone government bonds; on the meaning of a failed no-confidence vote on António Costa; on the Greek NPL reduction schemes; on the French Senate pointing out the dysfunction of the Élysée palace; on what to expect of the next European Parliament; and of supertanker Deutschland taking a turn towards the internet age.