Brexit Consequences Britain to Hold Snap Election in June

Prime Minister Theresa May announces plans for a general election on June 8 in a bid to solidify support for Brexit and take advantage of opposition weakness. Berlin and Brussels are miffed, fearing the move could delay talks.
Theresa May made the announcement outside her official residence, 10 Downing Street.

British Prime Minister Theresa May has announced plans to hold a snap general election on June 8, an unexpected decision that Brussels and Berlin fear will further delay talks over the country's exit from the European Union.

In a surprise speech Tuesday, the Conservative Party leader said she wanted Britons to decide on her Brexit plans and silence opposition critics.

"Every vote for the Conservatives will make it harder for opposition parties who want to stop me from getting the job done," she said. "Every vote for the Conservatives will make me stronger when I negotiate for Britain with the prime minsters, presidents and chancellors of the European Union."

Ms. May plans to seek parliament's permission for the vote on Wednesday. She is expected to secure the two-thirds majority needed.

Every longer bout of uncertainty certainly doesn’t help the economic and political relations between Europe and Great Britain. Sigmar Gabriel, German foreign minister

Coming less than a month after Britain officially triggered the two-year Article 50 process to leave the EU, the move caught Brussels by surprise. European Council President Donald Tusk in a tweet suggested it was a twist right out of an Alfred Hitchcock screenplay, though German and European officials more generally were hesitant to comment on an announcement that remains an internal matter of an EU member.

Marcel Fratzscher, head of Berlin’s DIW economic institute, said he expects the election to significantly delay the timetable for talks, something that can only cause more uncertainty in an already fragile European economy. EU leaders are set to nail down their own negotiating position during a summit scheduled for the end of April, and Brussels would have hoped to begin making some progress with their London counterparts in the spring.

Germany's foreign ministry sounded equally concerned: "Every longer bout of uncertainty certainly doesn’t help the economic and political relations between Europe and Great Britain," Foreign Minister Sigmar Gabriel said in an interview with Germany's Funke media group. He added that new elections will hopefully lead to more "clarity and predictability" in future.

But despite the concern over the short term, most observers acknowledge that serious negotiations were always unlikely to get underway until the dust settles on a series of national elections this year. The British vote will come a month after France decides on its next president and ahead of Germany’s federal vote on September 24. Talks with Britain were formally only set to begin in June, and both Brussels and London officially stressed that the election would have no effect on that timeline.

A general election in Britain was originally due in 2020. Polls released over the weekend suggested the Conservative Party, which currently has only a slim parliamentary majority, leads the main opposition Labour Party by 20 points.

But Mr. Fratzscher of DIW still voiced doubt that Ms. May will come away from the poll with a strengthened hand. "The new elections will lead to more uncertainty and thereby weaken the economy," he told WirtschaftsWoche, a sister publication of Handelsblatt.

Some British observers however suggested the election could actually be a boon for Europe by offering Ms. May more wiggleroom with Conservative Party hardliners, easing the bluster coming out of London.

"A successful election would give May the mandate to pursue her own Brexit strategy. My sense is that a stronger mandate and more time would allow a more patient approach and a softer Brexit, probably more in line with May's instincts," said Keith Wade, chief economist of Schroders.

The British pound fell as much as 0.4 percent against the US dollar, but rallied strongly after Ms. May concluded her announcement.


Gilbert Kreijger, Christopher Cermak and David Reay are editors with Handelsblatt Global in Berlin. To contact the authors: [email protected], [email protected] and [email protected]