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Parliament Rejects May's Brexit Deal Again: What It Means And What's Next

Elizabeth Balboa

The iShares MSCI United Kingdom Index (NYSE: EWU) and Vanguard FTSE Europe ETF (NYSE: VGK) opened slightly higher Wednesday after U.K. lawmakers voted down another Brexit deal proposed by Prime Minister Theresa May.

The proposal failed by 149 votes, representing a shrinking margin from January’s rejection.

Why It’s Important

A spokesperson for European Council President Donald Tusk said the rejection “significantly increased” the chance of a split without a deal, according to CNBC. 

“We regret the outcome of tonight's vote," the spokesperson said. "On the EU side, we have done all that is possible to reach an agreement.”

The no-deal option remains the U.K.'s default unless Parliament ratifies a withdrawal agreement, according to May.

“Further negotiations with the EU are unlikely to bring a breakthrough, so a snap election and further Brexit delays are becoming ever more likely," Citigroup analysts wrote.

The EU is willing to consider a “reasoned request for an extension” to the March 29 Brexit deadline, according to Tusk’s spokesperson. An EU approval of a Brexit extension would be decided unanimously.

What’s Next

May will bring two more votes before Parliament this week. On Wednesday, legislators will vote on a departure from the EU with no deal. If that fails, they will vote Thursday to request an extension for the EU’s two-year exit procedure. 

May said MPs have a "free vote," meaning MPs can vote with their conscience rather than with the party, according to the BBC

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