European Union leaders have approved a treaty with Theresa May outlining Brexit terms with the U.K.
According to the Wall Street Journal, the country’s Parliament is expected to vote on the deal in December. However, Conservative Party lawmakers, as well as some members of the opposition Labour Party, have voiced opposition for the deal.
Earlier this month it was reported that the deal being bandied about would be based on the existing system of financial markets in the EU known as “equivalence,” which has been seen all along as the deal the U.K. could expect to get out of the EU. If that proves true, it would be a concession on the part of the EU and a bit of bending on the “equivalence” rules.
Under the agreement, the U.K. in late March — when Brexit goes into effect — would enter a standstill transition period until December 2020. That could be extended until December 2022, which would require Britain to still follow EU rules while losing its right to vote.
In addition, the U.K. would stay inside the EU’s customs area for an indefinite period so there wouldn’t be a need to collect tariffs or check on goods in cross-border trade. Once the transition is over, it would mark the end of the free movement of people between the EU and U.K. and Britain would no longer have to make large contributions to the union’s budget.
If Parliament doesn’t agree to the deal, many EU leaders warned that better conditions wouldn’t be offered. The president of the European Commission, Jean-Claude Juncker, said it was “the best deal possible for Britain,” while Prime Minister Giuseppe Conte of Italy said the only plan B being explored was a preparation for no deal.
That’s a scenario no one wants. In fact, a deal may be necessary to protect the U.K.’s economy if a prediction from Standard & Poor’s proves true. The credit rating agency recently warned that Great Britain could be headed toward a long recession if it can’t strike a Brexit deal, and that failing to make a deal might bring Britain into a recession that could last as long as the one sparked by the 2008 financial crisis.