Another day, another deeply uncertain development in the Brexit saga. Chaos and uncertainty have become watchwords of the process, and business leaders are tired of the confusion.
Image: AFP/Getty Images/D. Leal-Olivas
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The Oxford English Dictionary, celebrated as a principal custodian of the English language, defines "uncertain" as follows: 'not able to be relied on; not known or definite.'
Such words are the stuff of nightmares for business leaders and market watchers, who thrive on things they can rely on. The deeply dismayed reaction of British business to the latest about-turn was best encapsulated by Carolyn Fairbairn, director-general of the influential Confederation of British Industry (CBI) lobby.
"This is yet another blow for companies desperate for clarity," she said in reaction to the canceled vote. "Investment plans have been paused for two and a half years. Unless a deal is agreed quickly, the country risks sliding towards a national crisis."
The price of uncertainty
The markets quickly reflected that lack of clarity. The British pound hit its lowest level since April 2017, and is now valued at €1.10 and $1.26. At the end of London trading on Monday, it had fallen 1.4 percent against the US dollar.
The FTSE 100 index also took a hit, with a sharp sell-off in the brief trading period that followed May's announcement to parliament. It had fallen by almost 1 percent by the end of the day.
The effects of the deepening uncertainty are being felt far from English and European shores. "The market is concerned that the postponement uses up valuable time before the March 29 exit date, and the risk of a no-deal scenario is growing," National Australia Bank economist David de Garis said of the effect on global markets.
The specter of a no-deal
The EU-UK deal currently has nowhere near enough support among British MPs to pass a House of Commons vote, but even more important is the fact that the EU have made it abundantly clear that the deal is not up for renegotiation.
Business leaders in multiple sectors and industries across the UK and Europe have consistently said that the best-case scenario would be for Brexit not to take place at all. However, Monday's events have increased the likelihood of a no-deal Brexit happening — by far the worst scenario, according to those same business leaders.
The economic implications of a no-deal Brexit, such as chaos at the Dover-Calais crossing (pictured) are disturbing for many business leadersImage: Getty Images/AFP/B. Stansall
German business and industry representatives, in classic Teutonic style, have been consistently blunt and direct in their opposition to Brexit. A statement from Holger Bingmann, President of the BGA — a trade association which represents the German wholesale, foreign trade and services sectors — did not even attempt to play down his frustration and fear with the whole process.
"What a mess!," he said in a statement. "Just three months before the deadline, companies still do not know what to expect and how to proceed. The next tremor of the Brexit quake will be felt on both sides of the English Channel. This is an unprecedented disaster.
"For the British side again to try and play with time and to renegotiate is unbelievable and irresponsible, not least for their own population."
Back to the border
The implications for business of a no-deal Brexit are profound. From the imposition of tariffs, customs, safety and other checks on future UK-EU trade, to possibly diverging regulatory standards on manufactured products, to chaos at borders and ports, the checklist of consequences is pretty scary for any business owner whose business has depended on UK membership of the EU.
The Ireland-Northern Ireland border (Ireland to the right, Northern Ireland to the left) has become the primary battle line in the Brexit processImage: DW/A. Sullivan
The region, part of the UK but whose citizens have the right to Irish citizenship under the terms of the Good Friday Agreement, has been recognized by the EU-UK agreement as being worthy of special status in the Brexit process. The agreement allows for it to effectively remain part of both the EU's customs union and the UK's internal market, regardless of how the Brexit process turns out.
That 'best of both worlds' scenario has been almost universally welcomed by business groups in the region, including those with long-standing affiliations to the hardline Democratic Unionist Party (DUP), on whose support May has relied for several key parliament votes and who oppose the deal on political grounds, regardless of its potential economic benefits for Northern Ireland.
Therefore, it is little surprise that business leaders in the region have reacted with the same concern and fear as those in the rest of the EU and across the Irish Sea to the latest convulsion in Westminster.
"Any delay to a future agreement is extremely concerning, particularly with just three months to go until the UK leaves the EU," said Aodhán Connolly, director of the Northern Ireland Retail Consortium.
"A no-deal outcome would result in higher costs, harming consumers in NI who already suffer from having half the discretionary spending power of those in the rest of the UK. Parliament must urgently find a workable proposal to avoid a cliff-edge no-deal scenario. The Brexit clock is ticking loudly."
Yet what happens when the hour finally strikes remains anyone's guess.
Brexit timeline: Charting Britain's turbulent exodus from Europe
Britain shocked the world when it voted to leave the European Union on June 24, 2016. DW traces the major events that have defined Brexit so far.
Image: picture-alliance/empics/Y. Mok
June 2016: 'The will of the British people'
After a shrill referendum campaign, nearly 52% of British voters opted to leave the EU on June 23. Polls had shown a close race before the vote with a slight lead for those favoring remaining in the EU. Conservative British Prime Minister David Cameron, who had campaigned for Britain to stay, acknowledged the "will of the British people" and resigned the following morning.
Image: picture-alliance/dpa/A. Rain
July 2016: 'Brexit means Brexit'
Former Home Secretary Theresa May replaced David Cameron as prime minister on July 11 and promised the country that "Brexit means Brexit." May had quietly supported the Remain campaign before the referendum. She did not initially say when her government would trigger Article 50 of the EU treaty to start the two-year talks leading to Britain's formal exit.
Image: Reuters/D. Lipinski
March 2017: 'We already miss you'
May eventually signed a diplomatic letter over six months later on March 29, 2017 to trigger Article 50. Hours later, Britain's ambassador to the EU, Tim Barrow, handed the note to European Council President Donald Tusk. Britain's exit was officially set for March 29, 2019. Tusk ended his brief statement on the decision with: "We already miss you. Thank you and goodbye."
Image: picture alliance / Photoshot
June 2017: And they're off!
British Brexit Secretary David Davis and the EU's chief negotiator, Michel Barnier, kicked off talks in Brussels on June 19. The first round ended with Britain reluctantly agreeing to follow the EU's timeline for the rest of the negotiations. The timeline split talks into two phases. The first would settle the terms of Britain's exit, and the second the terms of the EU-UK relationship post-Brexit.
Image: picture alliance/ZUMAPRESS.com/W. Daboski
July-October 2017: Money, rights and Ireland
The second round of talks in mid-July began with an unflattering photo of a seemingly unprepared British team. It and subsequent rounds ended with little progress on three phase one issues: How much Britain still needed to pay into the EU budget after it leaves, the post-Brexit rights of EU and British citizens and whether Britain could keep an open border between Ireland and Northern Ireland.
Image: Getty Images/T.Charlier
December 2017: Go-ahead for phase 2
Leaders of the remaining 27 EU members formally agreed that "sufficient progress" had been made to move on to phase two issues: the post-Brexit transition period and the future UK-EU trading relationship. While Prime Minister Theresa May expressed her delight at the decision, European Council President Tusk ominously warned that the second stage of talks would be "dramatically difficult."
Image: picture-alliance/AP Photo/dpa/O. Matthys
July 2018: Johnson, Davis resign
British ministers appeared to back a Brexit plan at May's Chequers residence on July 6. The proposal would have kept Britain in a "combined customs territory" with the EU and signed up to a "common rulebook" on all goods. That went too far for British Foreign Minister Boris Johnson and Brexit Secretary David Davis, who resigned a few days later. May replaced them with Jeremy Hunt and Dominic Raab.
Image: picture-alliance/empics/G. Fuller
September 2018: No cherries for Britain
May's Chequers proposal did not go down well with EU leaders, who told her at a summit in Salzburg in late September that it was unacceptable. EU Council President Tusk trolled May on Instagram, captioning a picture of himself and May looking at cakes with the line: "A piece of cake perhaps? Sorry, no cherries." The gag echoed previous EU accusations of British cherry-picking.
Image: Reuters/P. Nicholls
November 2018: Breakthrough in Brussels
EU leaders endorsed a 585-page draft divorce deal and political declaration on post-Brexit ties in late November. The draft had been widely condemned by pro- and anti-Brexit lawmakers in the British Parliament only weeks earlier. Brexit Secretary Dominic Raab resigned along with several other ministers, and dozens of Conservative Party members tried to trigger a no-confidence vote in May.
Image: Getty Images/AFP/E. Dunand
December 2018: May survives rebellion
In the face of unrelenting opposition, May postponed a parliamentary vote on the deal on December 10. The next day, she met with German Chancellor Angela Merkel to seek reassurances that would, she hoped, be enough to convince skeptical lawmakers to back the deal. But while she was away, hard-line Conservative lawmakers triggered a no-confidence vote. May won the vote a day later.
Image: Getty Images/S. Gallup
January 2019: Agreement voted down
The UK Parliament voted 432 to 202 against May's Brexit deal on January 16. In response to the result, European Council President Donald Tusk suggested the only solution was for the UK to stay in the EU. Meanwhile, Britain's Labour Party called for a no-confidence vote in the prime minister, her second leadership challenge in as many months.
Image: Reuters
March 2019: Second defeat for May's deal
May tried to get legal changes to the deal's so-called Irish backstop in the weeks that followed. She eventually got assurances that the UK could suspend the backstop under certain circumstances. But on March 12, Parliament voted against the revised Brexit deal by 391 to 242. EU leaders warned the vote increased the likelihood of a no-deal Brexit. Two days later, MPs voted to delay Brexit.
Image: picture alliance/AP Photo/T. Ireland
March 2019: Extension after second defeat
Following the second defeat of May's divorce deal, the European Council met in Brussels on March 21 to decide what to do next. EU leaders gave May two options: delay Brexit until May 22 if MPs vote for the withdrawal deal or delay it until April 12 if they vote against the deal. If the deal were to fail again in Parliament, May could ask for a long extension.
Image: picture-alliance/AP Photo/F. Augstein
March 2019: Brexit deal rejected a third time
On March 29, the day that the UK was supposed to leave the EU, British lawmakers voted for a third time against May's deal — rejecting it this time with a vote of 344 to 286. Following the latest defeat, May approached the main opposition Labour leader Jeremy Corbyn in an attempt to find a compromise, angering hardline Brexiteers in her own Conservative party.
Image: picture-alliance/AP Photo/House of Commons/M. Duffy
April 2019: Brexit delayed until Halloween
With the April 12 deadline looming after the third defeat of May's deal, EU leaders met again in Brussels to discuss a second delay. The only question was how long should it be? In the end, the UK and EU agreed to a "flexible" extension until October 31 — which can end sooner if the Brexit deal is approved. The UK had to take part in EU elections in May because their exit wasn't secured in time.
Image: Reuters/E. Plevier
May 2019: Prime Minister Theresa May resigns
Weeks of talks between Prime Minister Theresa May and the Labour party to reach a deal proved unsuccessful and further eroded her political capital. She triggered an angry backlash from her party after she tried to put the option of a second referendum on the table. The series of failures led May to announce her resignation, effective June 7, in an emotional address.
Image: Reuters/H. McKay
June 2019: Search for a new prime minister
After Theresa May announced on June 7 that she would leave office, other members of her Conservative party began clamoring for the top job. Within a month, the leadership battle came down to Jeremy Hunt (left), an EU proponent who fears a no-deal scenario, and Boris Johnson (right), one of the main proponents of Brexit.
July 2019: Prime Minister Boris Johnson
At the end of July 2019, Johnson was officially named Theresa May's successor as British prime minister. "We are going to energize the country, we are going to get Brexit done by October 31," he said after he was elected leader of the Conservative Party.
Image: Imago Images/Zuma/G. C. Wright
September 2019: Johnson's election threat
Conservative rebels and opposition MPs backed efforts to delay an October 31 Brexit deadline in fear of a no-deal departure. In response, Johnson called for a general election, saying his government cannot rule without a mandate after he stripped 21 rebel MPs of their Conservative status. The Labour Party said it would not back elections until legislation to block a no-deal Brexit was in place.
In late September, Britain's highest court ruled that Johnson's decision to suspend Parliament ahead of the UK's planned exit was unlawful. "This was not a normal prorogation in the run-up to a Queen's Speech," said the Supreme Court. Political rivals immediately called on Johnson to leave his post. Johnson said he would abide by the court ruling, though said he "strongly" disagreed.
Image: Reuters/H. Nicholls
October 2019: A new deal
British Prime Minister Boris Johnson managed to secure a deal with European negotiators that would allow the UK to leave the EU in an orderly manner. The deal received unanimous backing from the leaders of 27 other member states. But an attempt to get the UK Parliament to sign off on the deal failed. Instead, Parliament pushed for the Brexit deadline to be extended until the end of January 2020.
Image: picture-alliance/AP Photo/F. Augstein
December 2019: Lawmakers vote for Johnson's Withdrawal Bill
On December 22, UK lawmakers vote for Prime Minister Johnson's European Union withdrawal bill, which will see a leave date of January 31 2020 enshrined in law. Getting a majority to vote to pass the bill in the lower house has proven a major sticking point for the PM, but following a general election Johnson's Conservative party won control of the house and the bill passed with a 124 majority.
Image: picture-alliance/empics/House of Commons
December 2020: EU, UK 'finally' reach trade deal
After months of disagreements over fishing rights and future business rules, the EU and UK clinched a post-Brexit trade deal on Christmas Eve. Prime Minister Boris Johnson hailed the deal, saying the UK has "taken back control of our laws and our destiny." The deal will allow the UK and the EU to trade without tariffs, but also impose limitations on free movement and financial services.