(Fixes typo in first par)
LONDON, June 9 British Prime Minister Theresa
May's failed gamble on a snap election throws Brexit - and the
formal Brexit talks - into uncharted waters.
Voters dealt May a devastating blow in the snap election she
had called to strengthen her hand in the Brexit negotiations,
wiping out her parliamentary majority and throwing the country
into political turmoil.
For a menu of stories on the election:
Following are some scenarios for Brexit:
Formal Brexit talks were due to start on June 19, just under
two years ahead of a British exit due in March 2019. But May has
no majority and British politics is now deadlocked, meaning
talks could be delayed.
While May remains prime minister until a new government is
formed, she does not have a clear mandate for her interpretation
of Brexit that includes limits on immigration and leaving the
"Theresa May arrogantly gambled with our Brexit and blew
it," said a spokesman for the Leave.EU pro-Brexit campaign. "We
demand fresh leadership immediately."
Germany said there was no time to lose on negotiating Brexit
because time was ticking. France said the election result would
not call into question Britain's decision to exit.
Labour leader Jeremy Corbyn said Brexit talks should go
ahead as planned.
Given that Britain has already triggered the formal divorce
talks, it is unclear what mechanism could be used to delay the
BREXIT HARD OR SOFT?
If May forms a minority government with support from the
Northern Irish Democratic Unionist Party (DUP), then she would
enter Brexit talks heavily dependent on one side of the divide
in Northern Ireland and on the eurosceptic wing of her own
Her ability to drive Brexit reforms through parliament is
sharply diminished. With less room for manoeuvre, she may be
forced to reject compromises proposed by Brussels and drive a
"The likely narrowness of the majority will give an ability
for any small grouping of Conservative MPs to potentially block
legislation," JPMorgan said.
She warned EU ambassadors in January that attempts to punish
Britain would be an "act of calamitous self-harm" for EU
countries and repeatedly told voters during the campaign that
she would be prepared to walk away from talks without a deal.
A disorderly Brexit with no deal would spook financial
markets, tarnish London's reputation as one of the world's top
two financial centres and sow chaos through the economies of
Britain and the EU by dislocating trading relationships.
"The hung parliament makes both a 'soft' Brexit (staying in
the Single Market) and a chaotic Brexit (no deal) more likely
than before, potentially even a second referendum," Citi said in
a research note.
Still, "'hard-but-smooth' Brexit would remain our base
case," Citi said.
WILL BREXIT HAPPEN?
May has insisted that Brexit means Brexit but it is unclear
how long she will remain in power or whether another British
election will be called.
"If May resigns, the negotiations could be delayed by months
due to the leadership contest, potentially new elections and
even another process to design the UK’s negotiation strategy,"
If talks are delayed for long - and if British political
turmoil continues - then the timetable for Brexit will slip
while uncertainty could undermine economic confidence.
Before her defeat, May said she wanted to negotiate the
divorce and the future trading relationship with the EU before
Britain leaves in March 2019, followed by what she calls a
phased implementation process to give business time to prepare
for the impact of the divorce.
Corbyn, who voted against EU membership in 1975 but said he
voted for membership in 2016, told voters the issue of Brexit
had been settled. He wants a trade deal and a guarantee that EU
worker rights be preserved as part of any Brexit agreement.
"Whatever happens Theresa May is toast – it is just a matter
of time," Brexit campaigner Nigel Farage said. "Quite frankly I
don’t know what’s going to happen."
But Farage said he feared Corbyn could somehow manage to
form a minority government that would allow a second Brexit
The Liberal Democrats, whose votes in parliament could help
sustain a Labour government, campaigned on the position that
Britons should be able to vote again on the terms of the final
EU deal, and stay in the bloc if the deal was rejected.
Scottish National Party leader Nicola Sturgeon has argued
that Scotland, where a majority voted to remain in the EU last
year, should have the right to hold an independence referendum
at the end of the Brexit process.
"As a Brexiteer who believes in it with all his heart and
soul, my fear is that Corbyn forms a coalition with the SNP and
a few Lib Dems and we look down the barrels of a second
referendum in a few years time," Farage said.
(Reporting by Guy Faulconbridge; Editing by Andrew Heavens)