The EU’s heads of state and government are meeting in Salzburg at the moment and are mounting a renewed attempt to hammer out an exit treaty. But the negotiations remain difficult. The Irish border question is particularly intractable. In their search for solutions most EU heads of state now seem to favour a second EU referendum. They seem to assume that a second people’s vote would go in the EU’s favour and that Brexit could be called off. But as alluring as this may appear, from the purely practical points of view it will probably be almost impossible to hold such a referendum – especially before the British officially leave the EU on 29 March 2019.
A referendum can only be held with parliamentary approval, for which a bill would have to be agreed, a so-called “Referendum Bill.” The last “Referendum Bill” took a good seven months to get through the required and extremely complicated legislative procedure. The argument that things would move faster the second time round is doubtless based more on hope than fact. Since the referendum of 2016 the fronts in the British Parliament have become deeply entrenched and in the event of a renewed attempt to stage a referendum it may be assumed that there would be long-drawn-out negotiations on the formulation of the question, the required majorities, the eligibility to vote, and so on. In addition, the British Electoral Commission has already said that in the case of a renewed referendum it would set a campaigning period of no less than six months. So even if Parliament were to agree on a second referendum tomorrow, it would be almost impossible to hold this referendum before the United Kingdom’s official exit on 29 March 2019.
Apart from these practical obstacles, it also needs to be borne in mind that none of the larger parties is currently in favour of a second referendum. The Prime Minister even rejected the idea again just yesterday evening. What’s more, it would be by no means guaranteed that the outcome of a referendum at the present point in time would really be a “Remain.” Admittedly, the “remainers” do seem to have gathered more support in the past few weeks, but the opinion polls remain divided and it would be impossible to predict how the campaigns of the two camps would affect the mood in the country. In the worst case a second referendum would confirm the “Leave” vote and one would have gained nothing.
Sterling reacted predictably positively to the recent news. Investors are still betting on an innocuous outcome. But strong inflation and fundamental data, which are fuelling hopes of a further key rate hike by the Bank of England, are also contributing to the upbeat market sentiment.