Weakened May begins Brexit talks

LONDON • With her strategy unclear and her position insecure, Prime Minister Theresa May plunges this week into tortuous divorce talks with the European Union that will shape Britain's prosperity and global influence for generations to come.

At one of the most important junctures for Europe and the West since the 1991 fall of the Soviet Union, Mrs May's government is reeling from a crisis of her own making - the loss of her parliamentary majority in a June 8 snap election she did not need to call.

Such is the collapse of Mrs May's authority that her entire Brexit strategy is being picked apart in public by her ministers, her lawmakers and her allies on the eve of formal negotiations, which begin in Brussels today at 0900GMT (5pm Singapore time).

Despite signals from both France and Germany last week that Britain would still be welcome to stay if it changed its mind, Brexit Minister David Davis insisted yesterday there would be no turning back.

"As I head to Brussels to open official talks to leave the EU, there should be no doubt - we are leaving the European Union," said Mr Davis, who will launch the talks with chief EU negotiator Michel Barnier.

Britain has less than two years to negotiate the terms of the divorce and the outlines of the future relationship. Both sides need an agreement to keep trade flowing between the world's biggest trading bloc and the fifth largest global economy. But the other 27 members of the EU combined have about five times the economic might of Britain. They also have a strong incentive to deny the UK a deal so attractive it might encourage others to follow suit.

With Mrs May still hammering out the details of a post-election deal to stay in power with the support of a small Northern Irish party, there are fears of a disorderly exit that would weaken the West, imperil Britain's US$2.5 trillion (S$3.5 trillion) economy and undermine London's position as the only financial centre to rival New York. •Sunday UK newspapers contained reports of possible leadership challenges to the prime minister. The Tories are weighing whether the damage involved in replacing her would be greater than the risk of keeping her in place.

But even if Mrs May can stay in place, her weakness was demonstrated by the freedom with which finance minister Philip Hammond criticised her Brexit policy. Having said last Friday said that Brexit needed to be handled in a "pragmatic" way, yesterday he said Britain would still be leaving the EU's Customs union, but added that "transitional structures" would be needed to smooth that departure.

He also rejected the slogan "no deal is better than a bad deal", which Mrs May repeatedly used during the election campaign to argue that she would be willing to walk away from the Brexit table if other countries did not give her enough.

The Chancellor of the Exchequer described his position as pushing for a "jobs first" Brexit - a shift from Mrs May's focus on immigration. And while Mr Hammond restated her commitment to reducing net immigration to below 100,000, this too came with a qualification. "We have to be very clear that we're not going to do it in a way that damages the economy," he said.

REUTERS, BLOOMBERG

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A version of this article appeared in the print edition of The Straits Times on June 19, 2017, with the headline 'Weakened May begins Brexit talks'. Print Edition | Subscribe