Parliament sinks May's Brexit deal again, EU braces for no-deal exit

Lawmakers rejected Prime Minister Theresa May's Brexit deal for a third time on Friday, sounding its probable death knell and leaving Britain's withdrawal from the European Union in turmoil on the very day it was supposed to leave the bloc.

The decision to reject a stripped-down version of May's divorce deal has left it totally unclear how, when or even whether Britain will leave the EU, and plunges the three-year Brexit crisis to a deeper level of uncertainty.

After a special sitting of parliament, lawmakers voted 344-286 against May's 585-page EU Withdrawal Agreement, agreed after two years of tortuous negotiations with the bloc.

Within minutes of the vote, European Council President and summit chair Donald Tusk said EU leaders would meet on April 10 to discuss Britain's departure from the bloc.

The EU executive, the Commission, said that "a 'no-deal' scenario on 12 April is now a likely scenario".

May had told parliament the vote was the last opportunity to ensure Brexit would take place. She cautioned that if the deal failed, then any further delay to Brexit would probably be a long one beyond April 12.

"I fear we are reaching the limits of this process in this House," May told parliament after the defeat. "The implications of the House’s decision are grave."

"The legal default now is that the United Kingdom is due to leave the European Union on 12th April," she said.

The British pound, which has been buoyed in recent weeks by hopes that the likelihood of an abrupt 'no-deal' Brexit is receding, fell half a percent after May lost, to as low as $1.2977.

THIRD FAILURE

It was a third failure for May, who had offered on Wednesday to resign if the deal passed, in a bid to win over eurosceptic rebels in her Conservative Party who support a more decisive break with the EU than the divorce her deal offers.

It leaves May's Brexit strategy in tatters. With no majority in parliament for any Brexit option so far, it is unclear what May will now do. Options include asking the EU for a long delay, parliament forcing an election, or a "no-deal" exit.

French President Emmanuel Macron, speaking as parliament voted, said the EU needed to accelerate no-deal planning.

Dutch Prime Minister Mark Rutte told reporters: "One of the two routes to an orderly Brexit seems now to be closed. This leaves only the other route, which is for the British to make clear what they want before April 12."

"The risk of a no-deal Brexit is very real," he said.

May's deal had twice been rejected by huge margins this year and, although she was able to win over many Conservative rebels, a hard core of eurosceptics and the Northern Irish Democratic Unionist Party, which props up her minority government, refused to back it.

Next Monday, lawmakers who have tried to grab control of the process will attempt to agree on an alternative Brexit plan that could command majority cross-party support in parliament, something largely unheard-of in Britain's political system.

NEXT DEADLINE LOOMS

The defeat means Britain now has under two weeks to convince the 27 capitals of the EU that it has an alternative path out of the impasse, or see itself cast out of the bloc from that date with no deal on post-Brexit ties with its largest trading ally.

Many eurosceptics see this as their preferred option but businesses say it would cause huge damage not only to the world's fifth-biggest economy, but also to that of neighbouring Ireland.

However, any further extension would not only require Britain to take part in European Parliament elections in May, but also bring months of fresh uncertainty.

A second referendum could then be in play, although many lawmakers believe the most likely outcome and only way to solve the crisis will be a snap election.

The 2016 referendum vote to leave the EU revealed a United Kingdom divided over many more issues, and has provoked impassioned debate about everything from secession and immigration to capitalism, empire and what it means to be British.

Meanwhile the uncertainty around Brexit, the United Kingdom's most significant political and economic move since World War Two, has left allies and investors aghast.

Opponents fear Brexit will make Britain poorer and divide the West as it grapples with both the unconventional US presidency of Donald Trump and growing assertiveness from Russia and China.

Supporters say that, while the divorce might bring some short-term instability, in the longer term it will allow the United Kingdom to thrive if cut free from what they cast as a doomed attempt to forge European unity.

- Reuters