EU leaders approve May's Brexit plan

Now comes the hard part.

As expected, European Union leaders approved the plan for Great Britain to exit the EU in March, setting the stage for a crucial vote in the British parliament next month.


May needs a simple majority of the 650 lawmakers that sit in the House of Commons. Her 315 Conservative MPs (Members of Parliament) do represent the largest party in the House, but a significant number are against the plan. The Conservatives operate a majority in the Commons by working in tandem with 10 votes from the DUP.

The left-of-center opposition Labour Party has 257 lawmakers and would appear to hold the whip-hand. Labour has indicated they will ask their MPs to vote against May's deal, but there are a number of rebels that May can count on. It's estimated she would need around 40 Labour MPs to cross the divide and vote for her. Despite deep divisions within Labour, political analysts see that as a high threshold.

The third-biggest party, the Scottish National Party (SNP), has promised that all 35 of its MPs will reject the deal, calling it an unfair solution for Scotland.

Nonetheless, there is some optimism from certain market watchers, including analysts at Nomura. In a detailed research note last week, strategists at the Japanese bank said the alternatives to voting down the deal make it more likely that enough MPs would rather get Brexit done, rather than risk a no-deal or no Brexit at all. Their "base case" is for a deal to be voted through, which they assign with a 60 percent probability.

Crucial to May's chances to pass the plan is support from die hard Brexiteers, many of whom have already indicated their opposition. But May's most potent weapon of persuasion is the massive uncertainty of what would happen if Great Britain just up and left the EU without a negotiated agreement.

Some observers believe that the resulting chaos in the markets might trigger a recession. At the very least, it would complicate trade with other European countries enormously.

Another key to May's success will be to convince enough Labor party members to cross the aisle and support the deal. Given the opposition in her own party, it's believed May might need as many as 40 Labor members to put the deal over the top. This is an unlikely scenario at this moment, so it appears that May has her work cut out for her.

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