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Mood in Brussels is bleak. Many senior EU officials now put odds of no-deal at 60% or higher—their central scenario. Discussions are starting on how to cushion the EU’s economy from any macroeconomic blow that may arise from no-deal Brexit 1/
Senior EU officials think May’s deal is sunk. They’re sceptical the Commons can coalesce around an alternative plan 2/
And they think Corbyn “wants to remain a virgin”—that a destructive no-deal crash out that banishes the Tories from power might be his definition of the “national interest”, rather than helping Tory rebels get a softer Brexit deal over the line 3/
EU leaders also landed in a tougher place than Sherpas. Introduced more aggressive exit dates and conditions. Clearly fell on side of Commission’s legal advice (Council believed UK remaining a MS but not participating in EP elex was a risk, but a tolerable one). Leaders disagreed
So UK participation in EP elex is the sine qua non for any flexibility to 12 April date. Even in event of general election or a 2nd ref, UK will have to participate in EP elex. EU officials are planning another #EUCO in run up to 12 April 5/
I’m told that if UK hasn’t signalled intention to participate in EP elex by that time, this will be a Council to implement no-deal; lots of dates in mix—7 May, 22 May, 30 June.. 6/
Our revised probabilities still softer. Early election 25%—with strong upward pressure; Softer Brexit 30% (permanent customs union 20%; Norway Plus/Common Market 2.0 10%); May’s deal 15%; referendum 15% and no-deal 15% 7/
Why? True that May’s Brexit strategy is in disarray; she’s shelved plans for MV3, but still hopes Commons votes for Softer Brexit might frighten ERG into her camp 8/
Hasn’t given up on another go prior to 12 April. Some of these hardline Brexiteers do have an open mind. Her allies believe if she announces a departure timetable, 30-40 Eurosceptic opponents will move into her division lobby 9/
We also think May is likely to reject any Commons compromise on indicative votes, on grounds they are not binding, and are at odds with Tory manifesto—regardless of how open to question this latter argument is /10
So ministers are gearing up for clash with Parliament and warning that the only way to resolve stand-off would be a general election (though this might be in part designed to persuade Tory MPs who don’t want May to lead them into another election to back her deal) /11
We think Govt collapse and early election are rising, but still more likely than no-deal. May allies also suggest she would prefer an election to a 2nd Ref (an election could be used to try to pin blame on MPs; 2nd Ref would be an admission that May had failed) /12
Although May would need a 2/3 Commons majority to trigger an election under the Fixed-term Parliaments Act, Labour could hardly vote against after making a contest its number one demand /13
Still think odds of no-deal are small. The Commons has twice voted against a no-deal departure and Cooper has a new amendment to prevent a 12 April crash-out, calling on ministers to set out how they will avoid no deal by Thurs & seek a further A50 extension. It is likely to pass
And May appears to concede she can’t do no-deal without MPs’ support / ENDS
