Sterling fell sharply against the euro and dollar on fears of a no-deal Brexit and analysts expect it to remain weak.
London, United Kingdom – British Prime Minister Theresa May has left London for talks with European Union leaders aimed at seeking agreement to amend her Brexit deal.
May met Dutch Prime Minister Mark Rutte in The Hague early on Tuesday before heading to the German capital, Berlin, for talks with Chancellor Angela Merkel.
Following her meeting with May, Merkel told members of her Christian Democratic Union (CDU) party and its sister party the Bavarian Christian Social Union (CSU), that she saw “no way to change the agreement”, the AFP news agency reported.
She reportedly also expressed confidence that a solution to the impasse could be found, however.
May later travelled to Brussels, the administrative heart of the EU, where she held discussions with European Commission President Jean-Claude Juncker and European Council President Donald Tusk.
Tusk said the other 27 EU leaders will discuss Brexit at a special meeting on Thursday, at the beginning of a preplanned summit in Brussels which May will herself attend.
May’s whistle-stop tour comes a day after she pulled a parliamentary vote on her widely criticised EU withdrawal plan, acknowledging it would have been rejected by the UK’s lower chamber House of Commons.
The move sent the pound plunging against the dollar and the euro as fears of a no-deal Brexit spooked markets.
Amid accusations from the main opposition Labour Party that May had “lost control of events” and calls from her own ruling Conservative Party members – scores of whom were expected to reject her deal – to “govern or quit”, the prime minister pledged to go back to European leaders and seek changes to her deal in order appease MPs.
She said Britain needed “further assurances” to get the backing of the Commons, which is due to have a so-called meaningful vote on the withdrawal agreement in the near future.
A spokesperson for the prime minister confirmed on Tuesday morning that the vote would be held before January 21, allaying fears May could run the clock down and schedule a last minute parliamentary poll on her deal on the eve of Britain’s departure from the EU on March 29 next year.
A grouping of opposition parties including the Scottish National Party and Liberal Democrats, meanwhile, called on the Labour Party to follow through with an earlier threat to table a no confidence motion against May.
A Labour spokesperson said on Monday the party would “put down a motion of no confidence when we judge it most likely to be successful”, with no such action expected to take place until after a parliamentary vote on the British leader’s deal.
At the heart of the ongoing contention is the “backstop” proposal, a safety net provision which guarantees no hard border between Northern Ireland and the Republic of Ireland in the event post-Brexit trade negotiations between the UK and the EU prove unsuccessful.
The clause proposes that the whole of the UK, including Northern Ireland, will remain in a customs union with the EU “unless and until” the bloc agrees there is no prospect of a return to a hard border.
But critics in the UK parliament argue that the measure could tie Britain into the EU’s orbit indefinitely.
Tusk has warned Brussels would not change the deal which was brokered after months of tortuous negotiations between May and EU counterparts.
“We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification,” he said in a tweet early on Monday evening.
“As time is running out, we will also discuss our preparedness for a no-deal scenario,” he added.
I have decided to call #EUCO on #Brexit (Art. 50) on Thursday. We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario.
— Charles Michel (@eucopresident) December 10, 2018
Fellow European officials seemed to follow Tusk’s script.
On Tuesday, the European Parliament’s lead Brexit negotiator Guy Verhofstadt said May’s decision to delay the parliamentary vote and return to Brussels demonstrated Brexit had become a “mess”.
“My two messages: we’ll never let down Ireland; it’s out of the question to renegotiate the backstop & if you are looking for a closer future relationship to avoid the backstop, this will be no problem w/ us,” Verhofstadt saidin a tweet.
France’s minister for European affairs, meanwhile, said that the current withdrawal agreement is the “only deal possible” and Europe must prepare for Britain to crash out of the bloc without an agreement.
“Our responsibility is to prepare for a no deal because it’s a hypothesis that is not unlikely,” Nathalie Loiseau said.
“[But] I’m very worried,” she added. “A Brexit without an agreement would be very bad news for the United Kingdom and would have consequences for France.”
The UK is due to leave the EU on March 29, 2019, almost three years after it voted to leave the bloc.
The Bank of England, the UK’s central bank, has warned that departing without a withdrawal agreement could cause the UK’s gross domestic product (GDP) to shrink by up to eight percent.
The government, meanwhile, has forecast a potential economic slump of more than nine percent in such a scenario.