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Brexit summit: EU expected to grant UK extension with strings attached

Key Points
  • European leaders will decide on Wednesday whether to grant the U.K. another extension to its departure from the bloc, due to take place on Friday April 12.
  • The EU's 28 leaders, including British Prime Minister Theresa May, are heading to Brussels for an emergency summit dedicated to Brexit.
  • May has asked the bloc for a second delay to the U.K.'s departure.
British Prime Minister Theresa May arrives for a two-day summit of European Union leaders on March 21, 2019 in Brussels, Belgium.
Sean Gallup | Getty Images News | Getty Images

European leaders will decide on Wednesday whether to grant the U.K. another extension to its departure from the bloc, due to take place on Friday April 12.

The EU's 28 leaders, including British Prime Minister Theresa May, are heading to Brussels for an emergency summit dedicated to Brexit. This after May asked the bloc for a second delay to the U.K.'s departure.

The summit begins at 17:00 London time and May will formally present her case for requesting a short delay to Brexit until June 30, asking for the option to leave if a deal is agreed by the U.K. Parliament before then.

It's widely expected that the U.K. will be granted a longer, flexible extension with conditions attached, however, according to an invitation letter sent to EU leaders by European Council President Donald Tusk on Tuesday.

"I believe we should also discuss an alternative, longer extension. One possibility would be a flexible extension, which would last only as long as necessary and no longer than one year," Tusk said in his letter.

He called for a longer delay to avoid "the risk of a rolling series of short extensions and emergency summits, creating new cliff-edge dates."

Conditions that the U.K. could have to abide by, Tusk noted, would include no re-opening of negotiations over the withdrawal agreement (the Brexit deal) on offer. The U.K. could leave earlier than a newly agreed departure date if a deal is in place and Tusk reiterated that the U.K. could revoke Article 50 (the departure process) at any time.

A draft EU document circulated to diplomats ahead of the emergency meeting of EU leaders proposes an extension but leaves the date blank. It also notes that an extension cannot be used to undermine the EU or to start trade talks.

VIDEO3:5003:50
German finance minister 'still confident' UK will approve May's Brexit deal

German Finance Minister Olaf Scholz told CNBC Tuesday that Germany is "well-prepared for an agreement or a Brexit without an agreement … (but) it would be better to have something that is with a deal," he told CNBC's Annette Weisbach Tuesday.

Scholz welcomed talks between May and opposition Labour Party leader Jeremy Corbyn and said "the main thing now is to get an agreement in Parliament … I'm still a big fan of the tradition of pragmatism in Great Britain and I'm sure that this tradition will be a basis for a solution."

Ahead of the summit, sterling edged up to trade at $1.3073 and London's FTSE 100 was flat, at 7,419.

Ordering disorder

The U.K.'s request for an extension comes after a prolonged period of disarray in British politics over Brexit with 'Brexiteers' and 'Remainers' still sorely divided over the departure.

A majority of British lawmakers rejected May's Brexit deal three times and failed to find a majority in support of alternative options, but also rejected a departure without a deal. May has been holding cross-party talks in the hope that a compromise can be found over the deal.

Although there has been some reluctance among certain EU members (notably France) to grant the U.K. more time, with concerns the U.K. would have to take part in EU Parliamentary elections in late May but as a departing member could disrupt the EU's decision-making processes.

None the less, there is a recognition that a no-deal departure – the now infamous "cliff-edge" scenario where there is no post-EU transition period -- would be economically and politically disruptive for both the U.K. and its counterparts across the channel.

Tusk's invitation letter came after May traveled to Berlin and Paris Tuesday for talks with the German and French leaders in a bid to secure backing for a second delay to Brexit. German Chancellor Angela Merkel said a delay until the start of 2020 was a possibility.

Meanwhile, Downing Street said in a statement that May had sought to reassure French President Emmanuel Macron that the U.K. government was "working very hard to avoid the need for the U.K. to take part" in EU Parliamentary elections.