Can she do it?

Theresa May is surrounded. Even on her own side she has Brexit hardliners pushing her to be bolder, Europhiles wanting her to go softer, and a growing list of lawmakers who want her gone. All this as her key Brexit legislation goes to Parliament, where the fragility of her minority government will be plain to see.

That weakness is underlined today as the opposition Labour Party offers her a deal, Bloomberg’s Rob Hutton reports. Telling her she doesn’t “have the authority” to deliver an exit deal that protects jobs and the economy, Labour’s Brexit spokesman Keir Starmer said May should work with the “sensible majority” in Parliament pushing for a two-year transition. There are plenty of her own Tories in that group.

A looming deadline to make a deal with Europe looks increasingly out of reach, and EU chief negotiator Michel Barnier is talking openly of planning for talks to break down without a deal. That raises the prospect of Brexit being off the agenda at December’s crucial EU summit. The Irish border issue, which many thought had been parked, erupted back onto the agenda last week and Ireland continues to weigh up how much it should use its leverage.

May has two weeks to improve her offer to Brussels or risk trade talks being delayed until March – an outcome that businesses would hate. But during those two weeks her premiership is also at stake. 

The Sunday Times reported at the weekend that 40 Conservative lawmakers now back a challenge to her leadership, just eight short of the number needed to trigger a vote. The Mail on Sunday revealed that Foreign Secretary Boris Johnson and Environment Secretary Michael Gove have written a joint memo to May, warning that the government wasn’t working hard enough on Brexit and insisting that the transition must have ended by mid-2021. Gove declined to discuss the letter when asked about it on the BBC, beyond confirming its existence.

When the EU Withdrawal Bill returns to Parliament on Tuesday, it faces hundreds of proposed amendments to be considered over eight days of debate. Tories who want to keep close ties to the EU have put their names on many of the measures, suggesting the government will have to back down or be defeated. It only takes a handful of Conservative rebels for the government to lose a vote.

With May caught between the two sides of the Brexit argument, Brexit Secretary David Davis attempted on Sunday to buy some time. He waved away Barnier’s two-week timetable, saying the “real deadline” is December.

And if nothing is agreed by December, what then? European Council President Donald Tusk said back in October that would prompt both sides to “think about where we are heading.” Eurasia’s Mujtaba Rahman reckons no deal in December may mean a re-think of the whole process and a move toward a “no-deal deal.” 

So December really is the “real deadline.”

Brexit Latest

Plugging the Hole | Britain should pay “at least €60 billion” as the cost of its divorce from the EU, European Parliament President Antonio Tajani told Funke Mediengruppe. “If the EU accepted less, European citizens would have to pay for the difference.” The U.K. is under pressure to meet the EU estimate in order to unblock talks.

Gloomy Consumers | Visa’s U.K. consumer spending index fell 2 percent last month, a decline that was the quickest since September 2013, while a separate report from the British Retail Consortium showed shoppers’ footfall fell the most since the EU referendum. U.K. inflation and unemployment figures are due this week.

Bank Stop-Gap | U.S. banks have found a stop-gap to avoid moving hundreds of jobs from London after Brexit, the Financial Times reports. The plan involves using London branches of EU subsidiaries, and is known as “branch-back” by lawyers, the paper says.

Business Meeting | May meets business leaders from Europe to discuss Brexit. She will probably hope for their support pushing their governments to agreeing to start trade talks.

No Veto for Now | As Ireland weighs up how much it should use its leverage to get what it wants on the border issue, PM Leo Varadkar said at the weekend he wouldn’t “at this stage” make ultimatums or threaten to use a veto. For Ireland there’s a dilemma – it wants to make sure there is no hard border but it also wants talks to move on to trade as it’s one of the economies most dependent on U.K. ties and a no-deal Brexit would hurt Ireland more than any other country but Britain.

Polish Pessimism | Polish PM Beata Szydlo doubts a deal can be reached by December, according to an interview with the FT. “There are still too many points that are not closed yet.” Warsaw was one of the capitals visited by Davis last week on his diplomacy drive.

On the Markets | The pound fell 0.5 percent against the dollar in early Monday trading due to political uncertainty, and a measure of volatility spiked the most in more than a month.


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