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— This is the script of CNBC's news report for China's CCTV on December 11, 2018, Tuesday.
For Theresa May, she and European Union officials have struggled for thousands of hours to get the draft approved. The draft was approved by the British cabinet and the European Union summit. At the next level, however, the prospects for a vote in the house of Commons are extremely pessimistic. That's why on Monday afternoon in the United Kingdom, Theresa May issued a statement confirming that the government had postponed a vote about BREXIT deal which should be held in the house of Commons on Tuesday, because if the vote goes ahead, it will be rejected by the house of Commons by a "significant margin". So what happens next? There are several possibilities.
First, May said she would renegotiate the agreement with other EU states and she will send the draft back to the House of Commons for a vote after the EU confirms the backup plan. One thing to note is that January 21, 2019 is the deadline for the BREXIT deal. May said she is not sure about how long negotiations with the EU would last. However, the European Union is now adamant that it will not renegotiate the BREXIT agreement because it is the best and most likely one.
Next, the European council will hold a BREXIT summit on Thursday. At that time, EU officials will be ready to discuss how to help Britain move forward with its domestic vote on the current agreement, but will not renegotiate the backup plan. And because the deadline for BREXIT is so close, preparations for a no-deal exit will also be discussed.
So a no-deal BREXIT is now the second possibility that all parties have to start preparing for. As we know, withdrawing from the EU without an agreement means that there will be no transition period after BREXIT and the relationship between the UK and the EU will suddenly break down. This would be an economic and diplomatic blow to both Britain and the EU. There is also a third way, which is to hold a referendum again. The European court of justice said on Monday that the UK government could unilaterally withdraw its decision to leave the EU without seeking the views of other EU members.
There is no doubt that this has raised hopes in the anti-Brexit camp that a second referendum is possible. However, May warned that if the second one turned out to be anti-Brexit, some people will call for a third and fourth referendum, so things will become more divisive. The uncertainty behind these possibilities increased risk aversion, with both sterling and UK equities selling off.
Among them, the pound hit a 21-month low against the dollar, pushing it down more than 7 percent this year.
On the stock market, the ftse 100 erased earlier gains and closed down 0.83 percent.
We will also keep an eye on the next steps of the BREXIT agreement.