As Prime Minister Theresa May once again stepped back from the edge of Brexit and into an impenetrable miasma of uncertainty by cancelling a key parliamentary vote, the world had only one thing to say about Britain: Sell.
And they sold. Who would invest their savings, their political efforts or their hopes in the United Kingdom now?
The world unloaded its sterling, sending the pound to lows not seen since the aftermath of the 2016 referendum. The world dumped its British holdings, sending shares of the country’s banks and even the Royal Mail plummeting. And the world abandoned two-year British bonds in vast quantities, signalling a complete lack of trust in any form of stability emerging by 2020.
By cancelling (or, technically, postponing) the parliamentary vote on the departure deal she had delicately negotiated for months with the other 27 members of the European Union, Ms. May has sharply reduced the possibility of any exit that maintains Britain’s trading relationship with its neighbours.
Even worse, she cancelled the vote because, as most of us knew all along, it would never get a majority of votes in a Parliament whose anti-European members do not see her deal as anything resembling a real Brexit.
As a consequence, both Brexit itself and an escape from Brexit now seem highly unlikely. Even the collapse of Ms. May’s government – a real possibility now – would not give her country any clear or hopeful solution in the near term.
You could see Britain’s European partners, even those highly dependent on the British economy, backing away from Ms. May’s incendiary mess on Monday.
She tried to dress up her retreat as a strategic play to postpone the vote until she has better conditions closer to the deal’s Jan. 21 deadline. As Parliament prepared to hold an emergency debate on Tuesday over her decision to defer the vote (Speaker John Bercow described the postponement as inappropriate), Ms. May said she’d embark on a tour of European capitals, beginning with German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte.
She claimed she would get assurances from European leaders that the EU would never use its option to close the border between Ireland (an EU member) and Northern Ireland (a British province). That backstop is an option the EU certainly would have to use if, as seems likely, a free-trade deal could not be reached.
Those assurances aren’t going to be forthcoming. “We will not renegotiate the deal, including the backstop,” tweeted European Council President Donald Tusk on Monday afternoon. He said he’d “discuss how to facilitate U.K. ratification,” but, noting that “time is running out,” declared: “We will also discuss our preparedness for a no-deal scenario.”
That preparedness does not mean getting ready to sit down with Britain’s leaders for the umpteenth time. Rather, it means ensuring that European warehouses contain enough substitutes for British goods. And it means making sure there are teams of trained customs officers ready to stop and search every truck and train coming across and under the English Channel, because if there’s a “no-deal scenario" after Britain’s legal membership in the EU ends on March 29, British goods will be verboten without stiff tariffs.
So Europe’s leaders are betting that Ms. May will fail to reach a deal, and there is no other plausible deal. A few months ago, some of her party’s factions were keen on “Norway plus," following the lead of the prosperous Scandinavian country, which isn’t an EU member but enjoys free trade with the bloc. In exchange for this, Norway must allow the free movement of Europeans across its border, it has to abide by most EU laws – despite lacking a vote on them – and must pay dues to the bloc. There’s zero chance such an option would fly in Westminster.
Two possibilities remain. One is the sudden collapse of Ms. May’s Tory government in a confidence vote – something the opposition parties are threatening and some Tories may consider. Her party will have a hard time finding a leader, and Labour, also divided on Brexit, would not quickly resolve the crisis.
The other is that pro-European MPs from both parties could win a vote on cancelling Brexit or holding a second referendum. There’s been rising parliamentary momentum for a “People’s Vote," which would pit either Ms. May’s deal or a catastrophic hard Brexit against the option of remaining in the EU. Polls show the public supporting the option to remain – by a highly fragile margin.
Of course, the really sane option would be for Parliament simply to stop Brexit. The European Court of Justice ruled on Monday that Britain has the sovereign right to unilaterally halt its invocation of the EU’s Article 50, which ends membership. There’s no need for another referendum to do that (the referendum was never more than an advisory vote) – Parliament could simply hit the brakes and end this sorry affair with a single vote.
That would be the reasonable outcome. On Monday, the entire world was betting it won’t happen.