May wants Brexit delayed till June, EU resists

Brussels, March 20

The European Commission opposes extending British membership of the European Union to June 30 as Prime Minister Theresa May proposed on Wednesday, according to a document seen by Reuters.

In a Wednesday note, Commission officials said EU leaders meeting May at a summit on Thursday faced a "binary" choice of a short Brexit delay from March 29 to May 23, or a long lag to at least the end of this year, with Britain obliged to hold European Parliament elections in May.

"Any extension offered to the United Kingdom should either last until 23 May 2019 or should be significantly longer and require European elections," the document said. "This is the only way of protecting the functioning of the EU institutions and their ability to take decisions."

EU states due to receive additional legislative seats after Brexit would need to know by mid- to late-April if they would be denied those seats because Britain was staying.

The note also said in any extended membership, Britain should, "in a spirit of loyal cooperation", commit to "constructive abstention" on key issues, such as the EU's long-term budget and filling top EU posts after the May election.

Commission President Jean-Claude Juncker warned May in a call on Wednesday against requesting a delay beyond May 23, unless the United Kingdom takes part in the European vote, an EU spokeswoman said.

Most EU states vote on Sundays and will vote on May 26 but Britain votes on Thursdays, and so would vote on May 23.

Legal uncertainty

"President Juncker has formally warned the PM against including a date for the extension that is after the EP elections," a Commission spokeswoman said.

"That's why he repeated to her his advice ... that the withdrawal has to be complete before 23 May—otherwise we face institutional difficulties and legal uncertainty. European Parliament elections have to be held (in the UK) if the extension date is after 23 May," she said.

The EU is wary of undermining the legitimacy of the new European Parliament—which convenes on July 2—should Britain eschew the vote in May but remain a member of the bloc for longer, denying its citizens the right for parliamentary representation picked in a direct vote.

Any legal doubts over the new parliament would risk poisoning its next decisions, including on the appointment of a new European Commission later this year or on the EU's budget.

"Every decision would be open to legal challenge," the Commission said in its note.

The Commission, which may hold a stricter view on the matter than some of the 27 EU national leaders who would make any final decision, also said a long Brexit delay could last until the end of this year or longer and could be cut short if a solution were found earlier.

"Under all circumstances... the European Council should envisage a single extension, rather than a series of extensions, which would keep the European Union in limbo for an extended period," it said.

It insisted any leniency could be granted to Britain only on condition that it would not seek to use the extra time to renegotiate the stalled divorce deal. Reuters

‘No delay beyond June’

British Prime Minister Theresa May has sent a clear signal about what she believes is the correct way ahead on Brexit, her political spokesman said when asked if she could resign if the country's EU exit is delayed for longer than she wishes.

Earlier, May said that "as Prime Minister" she was not prepared to delay Brexit any further than June 30, prompting speculation that she could resign if her request for a three-month delay was refused by the European Union.

Pound slides

The British pound fell on simmering Brexit tensions after May asked EU leaders to delay the nation's departure until June 30.

On eve of an EU summit in Brussels, May told parliament that she has written to EU President Donald Tusk to ask for the withdrawal date to be moved from March 29.

At around 1300 GMT, sterling was down almost one per cent in value, sliding to USD 1.3149, while the euro rose to 86.40 pence. The unit was already in negative territory prior to May's announcement.

Analysts expressed doubt that the delay extension would allow May's Conservative government sufficient time to resolve the crisis.

"The pound's Wednesday only got worse after the confirmation that Theresa May is seeking a short delay from the EU, one that arguably does not give the government enough time to get through a sterling-positive Brexit deal," Spreadex analyst Connor Campbell told AFP.

"It appears that, despite the various votes highlighting MPs unwilling to leave the EU without a deal, that kind of disastrous exit is still very much on the table." Rebecca O'Keeffe, analyst at online broker Interactive Investor, was similarly downbeat.

"A short delay is being perceived as the worst of all possible worlds for the UK and sterling," she said.

"Rather than resolve the crisis, it suggests that Mrs May is likely to undergo three more months of brinkmanship. This will represent one more damaging quarter for UK businesses, especially those who had already implemented plans to cope with an end-March Brexit date. So it really is no surprise that the pound is going down, as investors face the prospect of another three months of purgatory."