Update: U.K. Voters Reject Prime Minister May’s Vision of ‘Hard Brexit’

Prime Minister Theresa May will plow ahead with her plan to withdraw Britain from the European Union even as her electoral defeat raised questions over whether she will have to soften her approach or even if she will last the distance.

Seven weeks after she called a snap election to strengthen her hand for the looming negotiations, May formed a new government with the backing of Northern Ireland’s Democratic Unionist Party. She was forced to seek an ally after her Conservatives fell short of the seats needed to rule alone.

The shock result plunged the country back into political chaos even as May insisted that the Brexit negotiations will open in two weeks as planned. European officials did little to hide their frustration that her botching of the election had likely complicated the already-thorny process.

Some even appeared to gloat.

“Evidently, the confidence of citizens that many things will get better and easier after leaving the EU is waning — even among Brexit supporters,” Juergen Hardt, foreign-affairs spokesman for German Chancellor Angela Merkel’s parliamentary caucus, said in a statement. The European Parliament’s Guy Verhofstadt said May had scored an “own goal.”

The election also threw into question the form of Brexit voters want. May campaigned to remove the U.K. from the single market so she could regain control of immigration and law-making.

She may now struggle to find majority support for that stance in the new House of Commons although she gave no indication that she will change tack as she promised to “deliver the will of the British people.” Her threat to walk away from the talks if provoked is now also diminished given Parliament might not endorse such a gambit.

Rubbish Bin

“Hard Brexit went in the rubbish bin tonight,” former Chancellor of the Exchequer George Osborne, who campaigned to stay in the EU before being fired by May, said on ITV. The Evening Standard, which he now edits, ran a front page with the headline “May Hung Out To Dry” which was later switched to “Queen of Denial.”

The views of Northern Ireland’s DUP will have to be taken into account in exchange for their support of May’s government. The DUP wants a “comprehensive free trade and customs agreement,” and a “frictionless border” with the Irish Republic.

Some in the Tory ranks will still urge May to maintain her push toward a hard Brexit and she might need to do so to keep them onside. That would leave May or her successor with less scope for horse-trading with the EU in return for a trade accord or post-Brexit transitional arrangement.

The pound headed for its biggest decline in a year amid another bout of British political uncertainty and instability 12 months since the narrow vote to leave the EU. The Eurasia Group said the election result meant the likelihoods of a softer Brexit and no deal at all had both increased.

Clock Ticking

The EU and U.K. were already racing against the clock with an agreement needed by the end of 2018 so that their Parliaments can rubber-stamp it. The two sides are also at odds over multiple matters ranging from how the talks will be structured to whether the U.K. should pay an exit fee. There’s also the issue of finding common ground on a complicated trade accord.

That threat and the rejuvenation of Jeremy Corbyn’s opposition Labour Party will intensify demands on the government to do more to preserve access to Britain’s biggest market than May was previously willing to.

About 44 percent of British goods and services flow to the EU tariff-free, but that link comes at the price of allowing free movement of EU workers into the country and letting the continent’s courts have a say in British laws. May balked at both.

“The prime minister called this election because she wanted to force through an extreme version of Brexit,” Labour’s shadow Brexit secretary Keir Starmer said. “It is clear already that she has failed in that endeavour.”

Pro-Brexit politicians also sensed a shift. “The clean Brexit that everyone in UKIP hoped for is now in jeopardy,” said Patrick O’Flynn, who represents the U.K. Independence Party in the European Parliament. UKIP’s leader quit after failing to win any seats.

The prime minister will remain under pressure to stand down after calling an early election that ended up squandering a 10 seat majority in Parliament. If she clings on, then she will make for a weakened negotiator given that she had declared that “every vote for the Conservatives will make me stronger” in Brussels. Her campaign also revealed a personal brittleness and willingness to reverse course when on the defensive, flaws the Europeans may seek to take advantage of.

“Could be messy for the United Kingdom in the years ahead,” Carl Bildt, a former Swedish foreign minister, wrote on Twitter. “One mess risks following another. Price to be paid for lack of true leadership.”

May’s failure to secure a sizable majority will still disappoint some in the EU who banked on her winning by enough to prove a stable and familiar counterpart able to make compromises. The EU side has long said it doesn’t matter how Britain voted because it has set its own negotiation position although it may now need to prepare for a different approach.

A hung Parliament also runs the risk of another election midway through the talks, further squeezing the time available for them. One reason for May holding this week’s ballot was to delay another vote until 2022 and provide leeway to cut deals over money and citizens’ rights without the threat of a public backlash.

Deadline Stays

The EU is unlikely to extend the March 2019 deadline for fear of Brexit conflicting with regional elections later that year. European Commission President Jean-Claude Juncker said “the fact that the British democracy expressed itself the way it did yesterday has no influence at all on the cap.”

The election had been expected to effectively ratify the referendum with polls repeatedly showing that those who wanted to leave the EU still do so, and that many who voted to stay in it are now keen to get on with the withdrawal.

An early test of whether the anti-EU or pro-EU wings of the Tories will be in charge will be how the government addresses Europe’s demands to pay a financial settlement before leaving the bloc and how the talks are sequenced.

Mujtaba Rahman, managing director at Eurasia, said May could stage “a symbolic show of strength to show the EU and domestic doubters that she is still the self-styled ‘bloody difficult woman’ standing up for the U.K.”