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The EU's Brexit negotiator, Michel Barnier says No-deal more likely but can be avoided.

Speaking on Tuesday morning, Mr Barnier said: "No deal was never our desire or intended scenario but the EU 27 is now prepared. It becomes day after day more likely."

Michel Barnier said a long extension to the UK's current 12 April exit date carried "significant risks for the EU" and that a "strong justification would be needed" before the EU would agree.

Theresa May is set for five hours of cabinet talks to tackle the deadlock.

Five Hour Talks

A majority of May's cabinet now supports no-deal.

A compromise seems unlikely, but who knows what May will threaten?

Eurointelligence Color Commentary

Let's tune into the Eurointelligence one more time for Brexit commentary.

We have been writing all along that the real Brexit choice is Theresa May’s deal - perhaps with an amended political declaration - versus no deal. A long Brexit extension would, in our view, require either a second referendum or a general election. Yesterday’s indicative votes demonstrated that there is no majority in the House of Commons in favour of a second referendum. And, in the current state of affairs, the Tories are in no position to fight an election.

Eurointelligence has been accurate on and off. I would rate them as generally accurate and always very helpful in presenting views. At times, however, even recently, Eurointelligence dropped May's deal all the way to third place, something I never did.

The meaningful vote will come back for the fourth time this week. Compromise is still possible. If she can persuade her cabinet to back an opening of the process, she might be able to entice some of the frustrated customs-union and single-market supporters - especially those within the Labour Party who oppose the second referendum.

The presence of a narrow path does not mean it will be taken. As the Times reports, a majority of cabinet ministers now favour leaving the EU with no deal. In the parliament, the number of Tory MPs happy with a sudden exit has swollen to about 200. This is obviously not a parliamentary majority, but it is big enough for the Tories to self-destruct. If you listen to some of the language from Tory MPs - unsuitable for print - it is quite possible that even the compromise we have suggested might fall short of a majority.

Eurointelligence implies there will not be more indicative votes. I suspect there will be one more attempt tomorrow. Wheter or not Theresa May will go for it is another matter. As I have pointed out, she has ways to reject it and would likely be comfortable doing that if the vote was close.

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Another intruding factor is the Tory party’s creeping loss of its parliamentary majority. Last night they lost Nick Boles, who along with Kinnock proposed the single-market compromise. The nominal majority is getting waver-thin.

No matter what happens now, there will be further resignations - from the cabinet and from the party. Elections are becoming likely, not because anyone wants them but because a vote of no confidence will eventually succeed.

New elections are a given, I expect Tories will win handily if Labour opts for a "People's Vote". Most are sik of this damn mess and want it to be over with.

What troubles us is the following consideration: from a narrow party-political point of view, the Tories might now conclude that a no-deal Brexit is the only way out of this mess. Our biggest fear for next week’s EU summit is that EU leaders will bounce the ball back to the UK at the final minute. With the summit scheduled for April 10, there would be a window of two days until the scheduled Brexit date, during which the House of Commons may have a chance to vote on unilateral revocation as the final way out. 

The result is that the probability of no deal has risen. We have been arguing for some time that the risk is material. But even now, we are not ready to elevate it to the single most likely outcome. If May can win over 30-40-odd Labour MPs, she will get the deal over the line.

Risks are Real

It does not trouble me in the least if Tories conclude no-deal is the way out, provided that is the outcome.

That's the kicker, isn't it? The risks are very real.

The best option for the Tories is May's deal vs no-deal, not May's deal vs soft Brexit. A customs union would be a devastating disaster if it won.

Thus, if May wants to take a gamble, she can produce a binary deal choice of customs union vs her deal. But to do so would destroy the party. She would immediately be ousted in a motion of no confidence. Tory MPs have already threatened this.

Also, May genuinely does not want a custom's union, so that would be a very risky move personally.

Cusp of Victory

May is on the cusp of victory. By that I do not mean her deal passes. Rather, she has almost crossed the finish line to delivering the binary choice of her choice.

The outcome is uncertain but the setup for Brexiteers has gotten better for sure.

Mike "Mish" Shedlock