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The Brexit Mess: 6 Goldman Scenarios

These are decisive days for the United Kingdom. The House of Commons is scheduled to vote on December 11 if it approves or does not approve the agreement reached by Prime Minister Theresa May with the European Union to implement the Brexit in an orderly manner on March 29, 2019.

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These are decisive days for the United Kingdom. The House of Commons is scheduled to vote on December 11 if it approves or does not approve the agreement reached by Prime Minister Theresa May with the European Union to implement the Brexit in an orderly manner on March 29, 2019.

Everything indicates that May will suffer a severe defeat, given the rejection that this pact provokes both among the most Eurosceptic parliamentarians (who believe that the United Kingdom will be too tied to the EU) and among the more pro-European (who believe that the country will be more prosperous if you reverse this process). The problem is that there is no consensus in Parliament on an alternative plan. This opens up six potential scenarios, according to a note sent by the US business bank Goldman Sachs to investors.

1- May loses the first vote in Parliament.

The prime minister renegotiates in Brussels changes to the political declaration on the future relationship between the United Kingdom and the EU. The vote passes in a second attempt. United Kingdom leaves the EU on March 29, 2019 in an orderly transition. This is the Goldman central scenario.

 2-The proposed agreement is defeated the first and second attempts.

May is replaced by a new prime minister of the Conservative Party, who tries to negotiate a new exit agreement with the EU. The vote passes on the third attempt. The United Kingdom leaves the EU in an orderly fashion in March 2019.

3- The pact loses the first and second voting.

The opposition raises a motion of censure against May. A new coalition government negotiates a new exit agreement with the EU. The EU agrees to extend the term of Article 50 and the United Kingdom leaves the EU in an orderly manner in March 2020.

4- The agreement does not come out after two votes.

Parliament raises a motion for a second referendum. This idea achieves a majority. the EU postpones the Brexit date and the new plebiscite takes place in mid-2019. Depending on the outcome, the UK remains in the EU or runs the Brexit in March 2020.

5- After the loss of the vote in the Parliament, the opposition sends a motion of censure, but there is no consensus for a new Government.

It is going to early elections, the EU agrees to extend the deadlines and the elections are held in the middle of 2019. Depending on the color of the new Government, the UK remains in the EU or runs the Brexit in March 2020.

6- The agreement does not exceed the parliamentary votes and the deputies do not agree on the next steps to follow.

The extension of Article 50 is not accepted and the United Kingdom leaves the EU without agreement in March 2019.

Another investment bank, JPMorgan, summarizes these scenarios in three outcomes. An agreed Brexit, which gives a 50% chance, a reverse to Brexit, with 40% options, and a chaotic Brexit without agreement, with 10%.

For the political adviser of a large British bank, “all potential routes lead to early elections, because the current Parliament is not going to agree on the best solution.” Those elections can be a de facto referendum, if the conservatives they go with a clearly pro-Brexit leader and the labor leader Jeremy Corbyn bets for another pebiscito that allows to give reverse gear “.

Another scenario that Goldman does not contemplate, but is handled in political circles, is that May resign the vote of December 11 before the expectation of a strong defeat and try to renegotiate with Brussels, something difficult to achieve.

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