Brexit Deadline Extended To October 31–Now What?

Leaders of the European Union gave the United Kingdom until October 31 to get a Brexit deal done. The decision was a rejection of U.K. Prime Minister Theresa May’s request for a shorter extension. European Union leaders simply didn’t believe May’s claims that all she needed was a short extension in order to get her Parliament to approve an exit deal. Back in London this result will increase pressure on May to resign. The longer delay also means that the United Kingdom will still be a member of the European Union during next month’s elections to the European Parliament. Hardline Brexit parties have also pledged to offer full legislative slates for the election.

Where do things go from here? Prime Minister May has floated the possibility of a compromise with the opposition Labor party on post-exit trade ties with the European Union. Her comments on her return to London downplayed differences between her Conservative government and the Labor party.  “There is actually more agreement in relation to a customs union than it is often given credit for when different language is used,” May said. “We’ve been very clear that we want to obtain the benefits of a customs union –- no tariffs, no rules of origin checks and no quotas – while being able to operate our own independent trade policy.’’

European leaders for their part continue to say that they will not reopen the withdrawal agreement itself, which covers the payout required on a U.K. exit. And that no future trade deal between the U.K. and the European Union will be negotiated until the terms of the withdrawal are set. European leaders have also said they will not negotiate their guarantee to keep the Irish border with Northern Ireland open.

On Tuesday the International Monetary Fund warned that a Brexit without a deal could lead to a two-year recession for Britain.