Has Theresa May overplayed her hand?

In mid-April, Great Britain’s Prime Minister May surprisingly announced her intention to hold premature elections on 8 June. Officially she did this to obtain her own mandate from the voters and, with an election victory in her pocket, strengthen her position as the Brexit negotiations with the European Union commence. Yet the fact that the opinion polls at that time were signalling a landslide victory, giving her a 20 percentage point lead over Labour, most likely also played a role.

Since then, the polls have been registering a clearly altered situation. While most polls show the Conservatives to be still ahead of Labour, this lead has now melted down from ten to five percentage points. The latest news that a survey by YouGov was actually forecasting the loss of the ruling party’s majority in parliament has finally shifted the focus back to the political uncertainty, and put the British pound under additional selling pressure.

While there’s some way to go yet and Theresa May still has good chances of being allowed to manage future government affairs, the question as to how things could continue in the event of an election outcome, with an unclear ratio of political representation, should be considered now at the very latest, particularly with the Brexit negotiations rapidly approaching. In the event of a ‚hung parliament‘, forming a new government will probably be anything but easy in these present times. No other party is likely to be available as a partner for Theresa May, given the huge differences and vast amount of damage inflicted in recent months. A collaboration between Labour, the Scottish SNP and the Liberal Democrats might be a possibility, at least at policy level. But, apart from the Scotswoman, the other parties involved have rejected a coalition government. Moreover, there is no assurance that such a tripartite coalition could attain a majority in parliament anyway. Compounding this is the fact that coalition governments are by no means usual in the UK.

If Theresa May stays on as leader of the government, the conditions for the Brexit negotiations with the European Union, due to begin in mid-June, will be the same as they were before the election. A ‚hung parliament‘, on the other hand, could prove a double-edged sword. On the one hand, a possibility would exist of working together with a British side that will most likely be more EU-friendly, thereby raising the likelihood of a soft Brexit. On the other hand, both the formation of a coalition under Labour’s leadership as well as the possibility of new elections would take time, thereby most likely postponing the starting date of the negotiations or at least of the necessary decisions. And the one thing the Brexit negotiations certainly do not have for achieving a compromise, given that the two-year deadline has already started, is time.

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