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Lost Track of Brexit? Here’s a Guide to the Endgame

The U.K. and European Union negotiators have struck a Brexit deal and EU leaders are set to sign off on it on Sunday. But it’s far from over yet. Prime Minister Theresa May’s political opponents at home are trying to thwart the agreement. It’s hard to see how she’ll win the necessary approval from the British Parliament, where she doesn’t have a majority and faces opposition on all sides. Yet many lawmakers from May’s Conservative Party are hesitant to undermine her with Jeremy Corbyn’s socialist Labour Party itching to take power. Here’s a guide to navigating the most perilous part of Brexit.

1. What’s the deal?

It’s the most important international agreement in Britain’s postwar history. The deal sets out the terms of separation that allow the U.K. to depart the EU on March 29 in an orderly fashion — and brings with it a 21-month grace period to give everyone time to adjust. Alongside it is a political declaration that outlines how the two sides want to trade in the future, though the details of a free-trade agreement will take years to work out.

2. What now?

May is rallying support from business groups and appealing directly to voters. The decision will hang on just a handful of votes in Parliament. There is opposition on all sides: pro-Brexit hardliners among May’s Tories, pro-EU Conservatives, the Northern Irish party that’s been propping up the government and nearly all of the opposition Labour Party. The main objection is that the guarantees May has offered to make sure a new new border doesn’t emerge on the divided island of Ireland risk binding the U.K. to EU rules forever. They argue that she’s caved to the EU and betrayed the electorate’s call to regain sovereignty, while treating Northern Ireland differently. May’s parliamentary whips are trying to poach support in the Labour Party while turning the screws on their own.

3. What happens if Parliament votes no?

Things get murky. Labour will push for a general election, but it’s not clear the party will succeed. The chaos that ensues provides the best opportunity for lawmakers to trigger a second referendum in a re-run of the June 2016 vote to leave the EU. For now, there’s not enough support for it in Parliament, but that could change. There’s a chance that if the deal is voted down, Britain would crash out of the bloc into a “no-deal” legal limbo that could snarl trade and freeze markets. Bottlenecks could bring shortages of everything from food to drugs and manufacturing components. But there’s another scenario: May is sent back to Brussels to try to extract what would probably be nothing more than token concessions. She can keep putting the deal to lawmakers until they cave — and the whips might just hope that crashing financial markets will encourage lawmakers to vote with the prospect of job losses and food shortages in mind.

4. So when’s the vote?

That’s the question on everyone’s lips — especially traders in the British pound, as the currency’s been whipsawed by events. The expectation is sometime in December. There’s some speculation it should happen before another EU summit on Dec. 13-14. One lawmaker calculated it can’t happen before Dec. 3. Parliament goes into recess on Dec. 20, though the vacation could be scrapped at a push. The deal must also clear the European Parliament, but that’s expected to be a formality.

5. Could May get pushed out?

It’s possible, though so far efforts have failed. On Nov. 16, pro-Brexit Conservatives mounted an effort to trigger a no-confidence vote in her as party leader. They need 48 of the 315 Tory lawmakers to send in letters to spark a vote, which would be held as soon as possible. The number of letters received is never confirmed, but only about half that number were announced publicly. A larger number of Tory lawmakers — 158 — would need to vote to replace her as party leader. That’s different than a Parliament-wide vote of no confidence in the government, which could pave the way to a general election.

6. How does the financial industry emerge from this?

The deal — once it’s through the U.K. Parliament — brings some relief to London’s financial hub because the grace period buys time. But because of the way the talks were structured, there’s still not total clarity about how banks will operate in the future. What is known is that there’s a big downgrade from the status quo. U.K. banks will have to use the same or a similar regime to the one U.S. and Japanese banks use now — it’s called “equivalence” and it has lots of pitfalls. The U.K. and the EU will try to get the new arrangements in place before the grace period ends.