In an attempt to avoid more rebellion from her party and even a cross-party alliance that would have weakened her further, PM May came out with a clear path to Brexit: (i) by 12 March at the latest the House of Commons will vote on whether to accept or reject PM May’s EU Withdrawal Agreement that she continues to renegotiate with the EU; (ii) if MPs reject that deal (likely in our view), they will vote on 13 March at the latest on whether to leave the EU with no deal; (iii) if Parliament votes against a no-deal Brexit (very likely), that option will be off the table and the House of Commons will vote on a short extension of the 29 March deadline – probably until end-June as on 2 July the new European Parliament is inaugurated. If Parliament votes in favor of an extension (very likely) PM May would most probably get the unanimous approval from the EU at the 21-22 March Summit. However, this last-minute solution does not take-off the uncertainty that is weighing on the UK economy (read here) while it opens three relevant options: (i) a renegotiated Brexit deal with an end-date to the Irish backstop; (ii) a second referendum; (iii) a renegotiated Brexit deal toward a permanent customs union (a softer Brexit).
