Anti-Brexit campaigners wave a European Union flag and a Union Jack, also known as a Union Flag, during a protest near the Houses of Parliament in London, U.K., on Wednesday, Feb. 27, 2019. Leading Brexit purist Jacob Rees-Mogg, who has opposed U.K. Prime Ministers Theresa May’s exit deal, appears to be softening his stance, making it more likely that the divorce agreement could win Parliamentary approval next month. (Bloomberg)

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Just as the Brexit saga was about to come to an end, it got more dramatic and a lot more confusing. An already uncertain process was thrown into disarray as the U.K. Parliament twice rejected the divorce deal that Prime Minister Theresa May negotiated with the European Union. The original exit day deadline of March 29 has been extended until April 12, postponing the risk of a disruptive no-deal exit that has businesses scrambling to prepare.

1. Where’s this drama going?

After her plan was routed in Parliament on Jan. 15, May vowed to renegotiate the deal. The EU offered some assurances but didn’t go far enough for critics at home, and the deal was defeated again. Facing an impending cliff-edge Brexit, the EU gave May a two-week lifeline. She aims to come back for a third vote, and will probably present Parliament with the choice of her deal or a delay so long that it could kill Brexit altogether. If she fails, she has until April 12 to decide whether to leave the EU without an agreement or request a much longer extension. Meanwhile, Parliament will hold a series of non-binding votes to determine what other options are possible, including alternative approaches to Brexit or stopping it in its tracks.

2. How would an extension work?

If May’s proposed Brexit deal is approved by Parliament next week the EU will give Britain a two-month technical extension to complete the formalities. If her deal doesn’t go through, the scenario gets more complicated. The importance of April 12 is that it’s the cut-off date for the U.K. to decide whether it will take part in elections for the European Parliament, scheduled for May 23 to 26. Participating in that election would effectively extend Britain’s involvement in the EU -- not a good look three years after the Brexit referendum. But if May decides against having the U.K. included in the election, it’s tantamount to opting for a no-deal Brexit.

What’s Next in Brexit? The Cliff-Edge Will Be Back: Timeline

3. What’s a no-deal Brexit?

There’s still a chance that Britain could crash out of the bloc on April 12 with no agreement or grace period. That would leave it with no legal arrangements to smooth trade and other transactions with its neighbors, snarling cross-border commerce. Bottlenecks could bring shortages of everything from food to drugs to manufacturing components. Both sides are preparing for the worst, for example taking steps to prevent a financial-markets meltdown. But while the measures can mitigate some of the more catastrophic outcomes -- such as flights being grounded -- they won’t address the obstacles to trade that would suddenly emerge.

Read more: Brexit Risks Still Looming That Could Disrupt European Finance

4. Why has May failed so far?

She faces opposition on all sides: from the pro-Brexit and pro-EU flanks of her Conservative Party, from the Northern Irish party that props up her government and from most of the opposition Labour Party, which wants to keep close trading ties to protect jobs. The main objection to May’s deal from Tories and the Democratic Unionist Party is to guarantees it includes to ensure that a new physical border doesn’t emerge between Northern Ireland, which is part of the U.K., and the Republic of Ireland, which will remain in the EU. Critics say this so-called “backstop” provision risks binding the U.K. to EU rules forever. They argue that May caved in to the EU and betrayed the electorate’s call to regain sovereignty, while treating Northern Ireland differently to the rest of the country.

Read more: Why Ireland’s Border Commands Its Own Brexit Backstop

5. What does the rest of May’s deal look like?

Alongside the divorce treaty was a non-binding political declaration on what future ties between Britain and the bloc should look like. It was vaguely worded, an intentional move designed to help May get the deal through a divided Parliament. But that vagueness became a liability as lawmakers complained May was asking them to sign off on a “blind Brexit” -- a departure from the EU without a clear sense of what the future holds. A permanent deal on economic and trading ties was meant to be thrashed out during the 21-month transition, or grace period, that starts the day Britain leaves (but only if the divorce deal is ratified).

6. Can the whole thing be called off?

Yes. But there are some huge obstacles. At least for now, there isn’t a majority in Parliament for a second referendum. Jeremy Corbyn, leader of the opposition Labour Party, has come out in favor of a second referendum, but with reservations. May says it would undermine faith in democracy and rip the country apart. In any case, it’s not clear what the result would be: Polls indicate that support among voters is now more strongly in favor of remaining in the EU than leaving, but that was true last time too. Leave won in 2016 with 52 percent of the vote.

Read more: Why Britain Voted to Say ‘Adieu’ to the EU: QuickTake

7. How is the uncertainty affecting global business?

Companies operating in Britain have bemoaned the government’s lack of clarity over Brexit’s impact, warning that unanswered questions about everything from trade policy to immigration laws are throttling hiring and investment decisions. Manufacturers who import or export goods now don’t know what will happen after April 12. The prospect of Brexit has already prompted global banks to move operations, assets and people to Frankfurt, Paris and other cities. Manufacturers and broadcasters have also started moving facilities, while companies are stockpiling to prepare for the worst.

To contact the reporter on this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net

To contact the editors responsible for this story: Leah Harrison Singer at lharrison@bloomberg.net, Andy Reinhardt

©2019 Bloomberg L.P.