EU to grant May's Brexit delay, but not without conditions

European Unionleaders will grant British Prime Minister Theresa May a second delay toBrexit, but they could demand she accepts a much longer extension, as France pushed for conditions to limit Britain's ability toundermine the bloc.

In a sign of just how far the three-year Brexit crisis hassapped British power, May dashed to Berlin and Paris to askAngela Merkel and Emmanuel Macron to allow the world's fifthlargest economy to put off its divorce from April 12.

While it was not immediately clear what Merkel and Macron,Europe's two most powerful leaders, agreed on with May, an advancedraft of conclusions for Wednesday's emergency EU summit saidBritain would be granted another delay on certain conditions.

"The United Kingdom shall facilitate the achievement of theUnion's tasks and refrain from any measure which couldjeopardize the attainment of the Union's objectives," read thedraft seen by Reuters.

As a full member state of the EU, Britaincould in theory exercise a veto on any major policy decision.

May has asked the EU for a Brexit delay to June 30, but thedraft left the end-date blank pending a decision by the other 27national leaders on Wednesday in Brussels.

More than a week after Britain was originally supposed toleave the EU, May said she fears Brexit might never happen as shebattles to get a divorce deal ratified by a divided British Parliament.

After her pledge to resign failed to get her deal over theline, she launched crisis talks with the opposition Labour Party
in the hope of breaking the domestic deadlock.

"People are tired and fed up [with Britain's indecision] but what to do?" one EU diplomat said. "We won't be the onespushing the U.K. off the cliff edge."

How long?

Another EU official involved with Brexit said no Europeanpower wanted the chaos that they fear a "no-deal" exit would sowthrough financial markets and the EU 27's $16 trillion US economy.

"Nobody wants to pull the plug by April 13," said theofficial. "But for how long I don't know. And France will aska lot of questions in Brussels."

But as May arrived at the Elysee Palace in Paris to a guardof honour, she was unable to trumpet any breakthrough withLabour.

Shortly before she landed in Paris, an official in Macron'soffice said that "in the scenario of an extended delay, one yearwould seem too long for us."

He added that if Britain did delay its exit, it should nottake part in EU budget talks or in choosing the next presidentof the EU's executive commission and that the other 27 memberstates should be able to review its "sincere co-operation."

Irish Prime Minister Leo Varadkar said Macron would not vetoMay's extension but wanted conditions attached.

"He (Macron) certainly wants to know about conditionality,particularly the issue of the United Kingdom being involved infuture (EU) decision-making," Varadkar said.

'Just do it.Stop Brexit'

Earlier in the day, May met Merkel at her riversideChancellery, a short walk from Berlin's Brandenburg Gate, anddeparted with a warm exchange of kisses.

While they discussed Brexit, Germany's opposition liberalFDP party drove an advertising van past the Chancellery with aslogan reading: "Dear Theresa May. Just do it. Stop Brexit. Makethe most of Europe's opportunities."

Several EU diplomats said the 12-month extension proposed byEuropean Council President Donald Tusk, who will chair theWednesday summit, was unlikely to fly and several capitals hadagreed with France that this would be too long, fearing aprotracted distraction from other pressing EU business.

In London, British Solicitor General Robert Buckland saidMay would "listen carefully" to any constructive suggestionsmade by the EU on the length of the extension. He conceded thatthe government might not have managed to ratify an exit deal inparliament before European elections are held on May 23-26.

According to the draft conclusions, if Britain didn't takepart in EU parliamentary elections properly, it would have toleave on June 1, 2019.

The pound, which has seesawed so much on Brexitnews that some investors have stepped away from the sterlingmarket, rose and then dipped on speculation Merkel could offerMay a better deal. Germany denied that.

A kingdom, divided

The 2016 referendum revealed a United Kingdom split overmuch more than EU membership, and has sparked impassioned debateabout everything from secession and immigration to capitalism,empire and what it means to be British.

Yet nothing is yet resolved.

Unable to convince enough of her own Conservatives of themerits of her deal to get it passed, May is courting socialistJeremy Corbyn, whose Labour Party wants to keep Britain moreclosely tied to the bloc after Brexit.

Labour's demands include keeping Britain in a customs unionwith the EU, something that is hard to reconcile with May'sdesire for Britain to have an independent trade policy, andpotentially a second referendum on any deal.

After Tuesday's round of talks, Labour said it had not yetseen a clear shift in May's stance.

"We had further detailed and wide-ranging talks with cabinetministers and officials today," a Labour spokesperson said. "Wehave yet to see the clear shift in the government's positionthat is needed to secure a compromise agreement."

A customs union with the EU, seen as the most likely areafor compromise but so far resisted by May's government, was thefirst item on the agenda for the talks, which were to includefinance minister Philip Hammond. Talks resume on Thursday.

The idea of a softer Brexit is anathema to eurosceptics inMay's Conservative party who have helped to defeat her divorcedeal three times this year.

Meanwhile, British lawmakers on Tuesday approved by a420-110 margin May's plan to seek to delay Brexit to June 30while she tries to strike a compromise with Labour.

The government was forced to hold the vote after parliamentpassed a law on Monday giving themselves power to scrutinize andmake changes to May's request to extend the Article 50negotiating period a second time.