The extension of the Brexit deadline to Oct 31 eliminates the risk of Britain’s exit from the EU without an agreement, a situation that could have been “a terrible outcome,” IMF Managing Director Christine Lagarde said…reports Asian Lite News
“At least (the) UK is not leaving on April 12 without a deal. It gives time for continued discussions between the various parties involved in the UK,” said Lagarde during the first formal press conference held during the ongoing International Monetary Fund (IMF) and World Bank Spring Meetings in Washington.
“It probably gives time for economic agents to better prepare for all options, particularly industrialists and workers, in order to try to secure their future,” she added. “A no-deal Brexit would have been a terrible outcome.”
The top IMF official emphasised that the Brexit postponement does not fully resolve the situation but at least offers the parties more time to continue with their discussions on how Britain can best make the break.
The Fund on Tuesday scaled back its economic growth forecasts for the UK to 1.2 per cent for this year and 1.4 per cent in 2020, saying that the uncertainty surrounding Brexit is one of the factors weighing on the global economy.
The 26 countries that will remain in the EU after Britain’s exit agreed to grant London the extension to Oct. 31, which is midway between the short extension France had lobbied for and the longer one favoured by Germany.
After an extraordinary summit that concluded on Thursday morning after several hours of discussion, the 26 agreed on the new Brexit schedule, which includes an intermediate evaluation of the process at the bloc’s regular summit in June.
The mandate of the current European Commission ends on Oct. 31 also, and thus London would not be part of a new EC.
British Prime Minister Theresa May had requested an extension until June 30, while the president of the European Council, Donald Tusk, had said he was in favour of an extension of a year, at the longest, to allow the UK to leave the EU as soon as it is ready and meaning, in effect, that London would have to take part in the upcoming Europe-wide elections.
May’s request to delay the withdrawal until June 30 was aimed at allowing time for deal to be approved by Parliament, which has rejected her Brexit proposal on three occasions.
The inclusion of a mid-point status review leaves open the possibility that the UK can be out of the EU well before Oct. 31.
EU heads of government gathered in Brussels on Wednesday for an emergency summit to consider the appeal from May ahead of the existing Brexit deadline of April 12.
The original Brexit date, enshrined in UK law, was March 29, but with Parliament unwilling to endorse the withdrawal agreement, May sought and obtained late last month a dual-option delay.
London was given the option to delay Brexit until May 22, provided the House of Commons approved the agreement. Absent that approval, the UK would have until April 12 to propose a way forward or leave without a deal.
May, who leads a minority Conservative government that depends for survival on its alliance with the right-wing Democratic Unionist Party of Northern Ireland, entered talks with the main opposition Labor Party in hopes of getting her deal through the House.
Britons voted by a margin of 52 percent to 48 percent to leave the EU in a June 2016 referendum.