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CNN Live Event/Special

E.U. Expected to Propose up to One-year "Flextention;" EU Leaders In Brussels for Emergency Summit; Grybauskaite: We'll Propose extension beyond June 30th; Lithuanian President: We Support Brexit Delay "In General;" UK's May Asks for Brexit Delay to June 30. Aired 12-1p ET

Aired April 10, 2019 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[12:00:43] RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Six o'clock in Brussels, as we speak, the crucial E.U. summit is getting under way to decide the next steps for Brexit. Across the Atlantic it's 5:00 noon in New York and wherever you are, today is Wednesday so far.

Cap in hand, Theresa May is here asking for more time, she may get longer than she bargained for, a flex extension of up to a year is being talked off. Some people say Britain would take a wrecking ball to Europe if it doesn't leave the club right away, we'll discuss that here, and also in London and in Berlin. And the mood music in Westminster where apprehension is high on tonight's talks, we'll all produce.

We're live from the E.U. summit in Brussels, I am Richard Quest and you're with The Express.

This is the moment, this is the day, and with those words, the European Commission's Chief Spokesman ushered in tonight's emergency meeting in Brussels. Twenty-seven E.U. leaders are now here, and they'll be making a choice. A no-deal Brexit on Friday to run over the cliff edge, or to grant Theresa May her request for an extension.

There's other questions too, it the extension is granted tonight, and most people seem to think that it will be, how long until June the 1st when the prime minister wants it June the 30th, when the prime minister wants it. Or the end of the year, next March, if it pays your money it takes your choice. And under all conditions France may want to attach some strings to protect the E.U. from possible bad behavior by Britain.

And back in Westminster, has it all play out conservative Remainers and Brexiters, a split over delay. Now Erin McLaughlin has spent more time than its own expertise in this building watching over the Brexit process, she is with me now. Will Theresa May get her extension?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: I think that remains to be seen at this point, at least not the extension perhaps that she was hoping for that June 30th extension that she has requested, she wrote to Donald Tusk asking for that. And at the moment E.U. diplomats and E.U. officials tell me that the direction of travel seems to be in favor of the President of the European Council, and his proposal for a flex extension, an extension of up to a year that then contracts once the U.K. ultimately passes the Withdrawal Agreement.

QUEST: The -- I get June 30th is a non starter, because once you passed may if you haven't passed the Withdrawal Act then you wouldn't have held elections and it will be a right real mess.

MCLAUGHLIN: Yes, they will have a problem with that, although I'm told that some member states are pushing perhaps considering a shorter extension, perhaps weeks, or a month or so to limit the damage that a longer extension would entail namely the U.K. remaining inside the E.U. during those critical elections and anything else in terms of decision making they could influence.

QUEST: How much of this is they just want part of it all. You know, I mean I was watching the feed of the leaders arriving, Angela Merkel, very sour faced, as if this is the last thing they wanted to do this week.

MCLAUGHLIN: Exactly, and I can't tell you how many conversations I've had with tired diplomats, tired senior E.U. officials, they are tired of seeing Brexit over and over and over again, hijack critical E.U. summits. There is a critical summit in June. The last thing they want to be doing is discussing this in June. Also in consideration go the business community and certainty for business, and citizens, short extension, keep these cliff edges that keep arising really problematic, that's factoring into the long extension camp.

QUEST: All right, so if you get a year, and let's say just end of the year, and they only want to try and avoid March of next year because of the budget you process, does that then take the pressure off of everyone?

MCLAUGHLIN: I think it does, and I think it also stops E.U. leaders from continuing to come back here to Brussels every two weeks to consider this question, it alleviates the worry for businesses and citizens of that dreaded cliff edge. That is the argument for the long extension.

[12:05:06] There is very little hope among Diplomats that politically the U.K. in that time period will be able to work us out which raises the question, well, what is the point of a long extension if they're just back what they started.

QUEST: Yes, stop, we need to listen to Michel Barnier who's speaking.

MICHEL BARNIER, EUROPEAN CHIEF NEGOTIATOR FOR THE UNITED KINGDOM EXITING THE EUROPEAN: -- withdraw of the U.K. which is our common interest. So now it's up to the leader to decide tonight.

(CROSSTALK)

QUEST: And all right, so Michel Barnier is now here as well. Last question here, I mean, we're going to make two lines of these things but you're an expert. It's 6:00 now, what time are you estimating dinner is over and press conference takes place?

MCLAUGHLIN: I'm told that when 27 E.U. leaders gather around the table to decide something, anything could happen, expect a late evening.

QUEST: All right, that's it. Thank you very much. Now those of you from Brussels, so if there is this larger extension or longer extension, we need to test that temperature in London. My speculation is a longer delay could lead to a second referendum.

Theresa May is sticking with her request with June 30th, what she said when she arrived of course, what she says is the most important thing is the smooth exit.

(BEGIN VIDEO CLIP)

THERESA MAY, BRITISH PRIME MINISTER: The purpose of this summit is to agree an extension which gives us more time to agree a deal to enable us to leave the E.U. in that smooth and orderly way.

And what matters I think is that I have asked for an extension to June 30, but what is important is that any extension enables us to leave at the point of which we ratify the withdrawal agreement. So we could leave on the 22 May and start to build our brighter future.

(END VIDEO CLIP)

QUEST: Nick Robinson in Downing Street, Julia Chatterley is in Amington Green. To you first Julia and how will parliament react if this delay does go longer than, I mean, in June the 30th, would -- I mean, to the end of the year and whole 12 months?

JULIA CHATTERLEY, CNN ANCHOR, FIRST MOVE: Well I mean they sanctioned an extension so far to June the 30th. I don't think anybody believes here that June the 30th is in anyway possible here for all the reasons that you and Erin have discussed. So we are looking at on much longer extension and that throws a whole realm of possibilities.

I think the hope here for at least the conservative party would be a case of its game if it's a knockout, if a deal can be agreed ultimately in the short-term to hit perhaps even before those European parliamentary elections and perhaps the U.K. can avoid taking parts in those. That remains a new question of course, can the Conservatives and the Labor Party come together here with some kind of deal and what would that be?

Will Theresa May of course stay on, that's another possibility and we know that whatever happens between two sides here reaching some kind of an agreement splits both the Conservative Party and the Labor Party. So it's very difficult, I think for M.P. to see a way forward here. Those that I've spoken to are simply exhausted, I think by this process.

So the one possibility, the one benefit here perhaps would be time to allow come (ph) ahead to prevail but who knows the realm of possibilities here are open and I think which of the other question here is what vote is one at the state? I've spoken to a whole realm of those as well who are exhausted by this, want to talk about other things. I think it was classic early today where you are in Brussels when that sign was dropped on one of the commission building saying, "Blah, blah Brexit stop climate change." I think for many people here in the U.K. they're exhausted by the shenanigans in parliament behind me and they want to talk about something else too.

QUEST: Yeah.

CHATTERLEY: The problem is the likelihood this is goes on for much longer. Back to you.

QUEST: And Nic Robertson in Downing Street, how long does Theresa May last after she's got this extension on head to. Can she stay as Prime Minister much longer?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, she is said that she wants to serve through the agreement over the withdrawal agreement that she would hand off the second phase. So part of it will be determined by that and by her own desires on what she said she's gone to Brussels for all about getting an extension but an extension that she estimates will be done by June 30th.

Therefore logically by her own estimation she would be ready to hand overt the reigns by June the 30th. But of course the reigns are not entirely in her hands as we understand today. You know, that reigns are in the hands to a degree over what political pushback Theresa May faces when she get started from Brussels today are in the hands of those EU27 leaders. What timeline that they give her. Do they give her to get out that she wants? The early get out will probably. But what constraints might they be and how might that put her in the eyes of her party particularly in the Brexiters, in the Euro-skeptic camp that could, if she came away looking weak and this is what Donald Tusk told President Emmanuel Macron of France not to do with Theresa May that perhaps that could shorten her political lifespan here.

[21:10:15] The June the 30th would allow her to attend the G20 in a soccer in Japan which is something that we understand that she wants to do, that's right at the end of June. So potentially we're looking at the end of June but I don't think we can really say for sure, Richard, at this stage.

QUEST: And back to you, Julia, the markets continue to take all this in the stride, will imagine -- I can't work out whether a year long extension will be perceived as greater uncertainty or will allow a bit of breathing space uncertainty for investors?

CHATTERLEY: And it's a great question, Richard. I actually think there'll be a little relief rally in Sterling versus the dollar if we see this extension simply because this still this lack of clarity over and no-deal exit. You know, we can roll out and say look, parliaments voted but the mechanism I think still is unclear for many people. So I think we'll see a relief rally.

But I think right up until the last two weeks, I was speaking to people who said, look, we're willing to roll out a no-deal exit. And I think they just -- they decided to give up and that's why we saw Sterling dropped a little bit lower. I think people just simply gave up, taking risk in Sterling until we get some clarity. So a slight pop out (ph) if we see this extension but nothing to write home about.

QUEST: All right. Thank you Julia and to Nic, and let me just recapture Michel Barnier has just arrived and what he said is numerical, this withdrawal agreement is the only way to ensure an orderly withdrawal, which is our common interest. So now it's for the leaders to decide. And those leaders are deciding. One of those leaders is the Lithuanian President. She is in the room and we'll hear her thoughts after the break.

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QUEST: The meetings are underway. Brexit is now in the hands of the EU27, a Lithuanian of course is at that table. I spoke exclusively to President Dalia Grybauskaite who says the delay will clearly go beyond June the 30th. And the president told me the U.K. needs more time and space.

(BEGIN VIDEO CLIP)

DALIA GRYBAUSKAIT?, LITHUANIAN PRESIDENT: We will support in general the request of Prime Minister May for extension but highly probable that we will propose a longer extension than she had been asked.

QUEST: And on this question of the length of extension, what would you be happy with, the end of the year, a whole year, till March of next year, what's your preference?

[12:15:06] GRYBAUSKAIT?: For me, the preference is now the timeline but the possibility and given the space for British politics to make a decision, to finally decide on something and that's why we're giving most space for government and House of Commons for the decision.

QUEST: But how much conditionality would you like to see on that, for instance do you think the U.K. could legitimately have a commissioner, what restrictions would you like to see the U.K. placed and -- on voting for instance?

GRYBAUSKAITE: I can say only one thing, only one condition is legitimate, is a request for U.K. to have European elections. Everything else, what you mentioned are far beyond the European treaties, that means legally it's not possible.

QUEST: And that's the interesting part isn't it, because Donald Tusk said that in his letter, to those who want to somehow penalize or neuter the U.K., you can't because it's a full member until the U.K. leaves.

GRYBAUSKAITE: All member states are equal and need to be respected, and that's exactly how the European Union works and how treaties are describing our status, so every proposal which goes beyond and makes some ungrateful proposals for diminishing the dignity of any member states, and legal. QUEST: How would you describe how you view Prime Minister Theresa May, do you admire her tenacity, are you frustrated by her stubbornness? As a fellow leader who obviously has, I mean you have your own domestic politics, so you know to an extent the difficulty that she's facing?

GRYBAUSKAITE: In some extent of course, but the situations are uncomparable in my country and in U.K. But as a head of state, I understand very much in what situation she is, what decisions she needs to make and how little support she has and understanding. And if look into it a bit from outside, not from British point of view but from outside, I can admire and can say that she has stamina, she got strength and patience, and that in this situation for Britain is very important to have.

(BEGIN VIDEO CLIP)

QUEST: That is the Lithuanian President talking to me. Erin McLaughlin was listening carefully. The leaders are not arriving, Leaders Varadkar is just speaking at the moment, (inaudible). And what are we hearing from those who are here?

MCLAUGHLIN: Yeah, we have also heard from the French President Emmanuel Macron, France is seen to be really playing hardball with the prospect of a long extension. I have here a bit of what he had to say, I don't think we have the sound, but I have a quote. He says "I am impatient to hear more from Teresa May, in my view nothing should be taken for granted, nothing. I hear rumors of a long extension, we must understand the reasons behind the request, what is the political project that justifies it, and what are the clear proposals."

QUEST: The rumor was what? Because you were talking to the ambassador, you'd heard the word from the ambassador.

MCLAUGHLIN: Yes, there was a meeting of ambassadors last night, it was the first time they had the chance to look at Donald Tusk's draft conclusions outlining everything, and France was the most vocal in the room according to my sources.

The French ambassador in terms of the prospect of the long extension questioning the costs of the long extension, and I am told, he was really the only member state that was raising such fierce objections to the prospect of a long extension. The takeaway here is it's not a done deal yet.

QUEST: What isn't a done deal?

MCLAUGHLIN: The idea that the 27 are just going to rubber stamp this flexible extension as proposed by Donald Tusk, we can expect curve balls to be thrown by France is what I'm told by my sources.

QUEST: Right but ultimately, ultimately France will fall into line with the others.

MCAUGHLIN: Well, it depends on what sort of game the French President Emmanuel Macron is playing. One diplomat questioning that, what are his motives? What does he want out of this process, because that's the other thing, when 27 sit down at the table, they're all coming with different motivations, their own domestic agendas and everything else, it's also a political decision. And when anything is a political decision it's a question mark.

QUEST: How did the Prime Minister though, the President that was just saying that it's not possible to put restrictions. You know, if you have a long extension the first thing that has to happen is that the U.K. takes part in European Elections, but then you have a new college of commissioners, kind of new commission coming in June, July, what do you -- would U.K. have a commissioner? Would they vote on all issues?

[12:20:00] MCLAUGHLIN: These are all questions that are going to be discussed at the summit today. The conditions according to Donald Tusk in his letter are very clear. No renegotiation of the withdrawal agreement, no negotiation of the future during an extension time period. I'm told that it's not necessarily conditions that they're also going to be discussing because legally the UK's a member state, it's reassurances, what sort of reassurances will the E.U. ask of Theresa May. Keep in mind Theresa May may not be leader for very long, so they also have that in the back of their heads when they take their decision tonight.

QUEST: Busy days, busy days, as you can see just a little behind me, I can see there is (inaudible) arriving. He's been having talks of course with Barnier. That's not of course (inaudible) and -- but all the leaders are now here.

More Brussels coverage when we return, as we also look at the big banks, speaking and chief executive they are facing, tough questions on Capitol Hill.

(COMMERCIAL BREAK)

QUEST: Welcome back, there's (inaudible) today's leaders are deciding on what sort of (inaudible) they are prepared to offer Britain for without one Britain faces being forced out of the E.U. without a deal. The Dow Industrials and other markets, take a look at the financial markets and how that trading. The Dow Jones is just off a tad, the Nasdaq is showing some reasonably strong gains at the moment. And if you take a look at the European markets, the stocks have finished mixed, with a positive industrial data from France and Italy.

The Pound, right out-- with the Pound is a little bit, the footage (ph) of the week, the Pound is rising, approaching $1.31 cautious optimism for a Brexit delay. The U.K. GDP also going with 0.31% in the last quarter, outpacing estimates. And now Brexit stockpiling may be to blame. Anna Stewart is in London, and the markets, bring us up- to-date, please.

ANNA STEWART, CNN REPORTER: Well, let's start off with that GDP report, Richard. So yeah a Brexit boost for the British economy possibly a little over egged there, I'm not sure we can really call it a boost, but certainly Brexit is stacked as you said, lots of manufacturing business have been stockpiling in recent months, so that pushed GDP for the three months that ended February to 0.3% but that's only ever so slightly higher than what was expected which was 0.2%.

We could see this obviously bleep further into the month with March and that's because obviously initially the Brexit deadline was March 29th so we could keep seeing that. Not necessarily something to celebrate I would say, Richard, I think that's fairly anemic.

And I'll bring you back to those reports that we were mentioning last week. One from Goldman Sachs, one from the Center of European Reform, both said that the British Economy had actually already lost 2.5% of GDP as a direct result of Brexit. And of course there's the Pound, you said it was slightly higher it's still a bit stuck in a rut though, isn't it Richard?

QUEST: Right, so this question of this stocks and U.S. economy doing marginally better, how much of this is Brexit stockpiling?

STEWART: Well, in terms of GDP I think for this figure certainly a lot of it is there, I think overall if you look at GDP and the fact that as Goldman Sachs say has lost 2.5% over the two and a bit years since the vote. I think that is a lot more due to a lack of investment.

[12:25:06] In terms of expectations with the pound, later today I don't think you're going to see any dramatic moves at all, it's been trading in this really narrow band now for weeks between a $1.29, $1.33.

Investors have very much priced in a Brexit delay, they have certainly priced out a no-deal Brexit some time ago after all the parliamentary votes. What would it take for a dramatic move, I think that would be the E.U. saying no to an extension or at least giving Theresa May a really, really short one, but that's highly unlikely from what I'm hearing from you guys there in Brussels.

QUEST: Anna Stewart in London, thank you. Other news now, the chief executives of seven of the biggest U.S. banks have returned testifying before the U.S. congress. It's the first time they're facing lawmakers since the financial crisis.

Now if you take a look you've got Citi, JPMorgan Chase, Morgan Stanley, you see them on the screen, the Bank of America. The hearing is in a democratically-controlled House and comes as they're heading into the earning season. Paul LaMonica is in the Money Pit and into the Money Pit we go, with Paul.

Are they going to get an ear bashing, and if so for what?

PAUL LAMONICA, CNN REPORTER: Yeah, I think it is fair to say that some of these CEOs are going to be criticized for a variety of things, most notably a lack of diversity, particularly in the executive suite at many of these banks, concerns about the scandals at Wells Fargo, even though Wells Fargo is not present at this particular hearing.

You know, there are legitimate concerns about whether or not the banks have really engaged in, you know, bad behavior since the financial crisis by Jamie Dimon and other CEOs have been talking about how their balance sheets are in much better shape than they were in 2008. There is no major risk of them causing an economic implosion right now, but all of the CEOs did talk about concerns such as slowing growth globally as well as cyber security as major risks for all the big banks in this country.

QUEST: The banks are extremely well capitalized now as a result of the changes, and the systemic risk that was there before has evaporated to a large extent, but they're making more money than some would say is honest or decent, Paul?

LAMONICA: Yeah, far for it to be the one to debate on whether or not a company in a capital society is making too much money or not especially one that is a financial services company, but I think people are worried about how profitable these banks have become, the clout that they have, the consolidation in the industry amongst just a handful of players.

And it is worth noting that they have done this by and large by becoming safer institutions, we've had numerous stress tests from the Fed, and global regulators, these banks don't have those toxic assets on their balance sheets anymore and they have been profitable because of a combination of strong investment banking over the past couple of years as well as lending to consumers.

QUEST: Paul LaMonica in New York. Paul, thank you. While we've been talking the Luxembourg Prime Minister Xavier Bettel has been speaking. He says, "If it's long or short, the extension, for me the main point is we have European elections. No elections, no extension, you can't be a member and having no elections. There is no free -- there is no lunch for free. So we need to know why there is a long extension and we need to know the reason."

Theresa May who is back here in Brussels is going to be giving that reason as we await the class photo, and we are getting more leaders reactions as they arrived. This is The Express live, tonight from Brussels.

(COMMERCIAL BREAK)

[12:31:12] QUEST: So we've just heard that the meeting has now begun as all 2018 E.U. leaders are here. And we're making a choice, no-deal Brexit on a cliff edge on Friday or a new delay in the issue that of course is how long Theresa May said she wants an extension to June the 30th. E.U. leaders are lightly to demand longer. And there will be terms and conditions.

The commissioners likely to offer a flex extension of up to one year and the question that of course will be the U.K., first of all, must take part in E.U. elections. And the secondly, the role it would play during that year.

Erin McLaughlin is with me, good to have you. Atika Shubert in Berlin, Bianca is outside the Houses of Parliament. Between the three of you, we are determined to understand the political machinations that are necessary. Starting with you, Bianca, how are they watching the events unfold? From London, I do beg your apology. We'll be with Bianca in just a moment. Erin, how are they're watching events there? What do they hope will come out tonight?

MCLAUGHLIN: Well, one consistent factor in all of these, and I'm detecting from the various E.U. leaders who've arrived is that they're going to be listening to what Theresa May has to say during her presentation very clearly. We are closely rather. We heard from Lars Lokke Rasmussen, the Danish Prime Minister, I have what he said just here, "I'm open to discuss a flex extension to the end of the year but as I just said she didn't asked for that. I'm willing to offer personally but the big question is, is there any added value linked to a longer extension and I think that's what we have to find out during our consultation with Theresa May at the beginning of the meeting."

So they're going to be listening and dissecting pretty much everything she has to say. Leader after leader has said that she's a determining factor tonight.

QUEST: Atika in Berlin, when we saw the Chancellor yesterday with Theresa May, there were serious deep in conversation but they does appear that there's a sympathy from the German Chancellor to give Theresa May as much room as possible.

ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Absolutely. I think that the chancellor has been perhaps one of the most sympathetic. You know, she hasn't expressed any frustration with the British Prime Minister or British Parliament. She has said that British Parliament needs a reasonable amount of time. That's what she said at Parliament this morning here in Berlin.

And so she seems to be of the mind that there should be a longer extension. She didn't say specifically how long that extension should be but basically enough time for British Parliament to resolve its differences, ratify the withdrawal agreement and then, if they get that done early before say May 22nd, they can leave the E.U. before those E.U. elections.

However, what Germany seems to be proposing is a longer extension would mean we don't have this constant cliff edge, you know, drama happening every two weeks. A longer extension would allow them the option of either leaving early or if they need more time to resolve their differences to do that.

So I think Angela Merkel has, by far, been one of the most sympathetic E.U. leaders and she seems to have a much more pragmatic approach going into the meeting today in Brussels.

QUEST: One of how long and how much they're prepared to do?

MCLAUGHLIN: Exactly.

QUEST: And listening to what Atika was saying, it's difficult to see that they come away from this. I mean, you know, people say they have with hand but to some extent they're all in the same boat.

[12:34:54] MCLAUGHLIN: That's right. And given what Atika just said there, Germany has been a long proponent of that long extension. France is seen as being a proponent of a shorter extension, so there's a clear divide playing out here that we heard from the Danish prime minister say that he is willing count an extension to the end of the year, the end of December, which seems to be the way other member states are going. So we're going to have to see how this plays out.

A critical factor in terms of the length of the extension is the budget, the E.U. budget is needs to be approved unanimously in March. So, really, what I am sensing here from my sources is the longest they're willing to countenance, any member state is willing to countenance is that March extension.

QUEST: All right, let's go back to Atika. Let's go back to Atika Shubert. Atika, when we put this, how much of all of this is -- how much of this is damaging to Angela Merkel in terms of her own domestic position, if it is at all?

SHUBERT: Well, I don't think it's too damaging to her. She is seen as somebody who is sort of steering the E.U. forward on this, the fact that the E.U. has remained united despite all this is actually quite an achievement for 27 nations to hold the line in dealing with, you know, with what is a historic moment, the first member to try and leave the E.U. and Angela Merkel is seen as the linchpin for this. So, it doesn't seem to be damaging her domestically. But I think she is very mindful that, you know, this is her last term and she will be handing over to a new leader.

So, she is aware that this is not just about now, but much -- but also about the future. In fact, today, when she was addressing parliament she said this is a historic moment, this has been accounted for, we know-- we knew that there might be members of the E.U. who wanted to leave, so this is a process we have to go through and five to 10 years from now we'll be looking back to see how well or how badly we manage this process.

QUEST: Let's go to Bianca in London. So, you've heard the view from Berlin. We've got a good friend Erin here, but the reality is what is possible. I mean, come on, Bianca, give the British parliament until the end of the year, until the middle of next year, what good bearing in mind the failures so far?

BIANCA NOBILO, CNN CORRESPONDENT: Well, if we consider the fact that critics of the prime minister said that had she tested where parliament support was for various Brexit scenarios at the beginning, then we wouldn't be in this mess, I'm quoting from lawmakers when I say that.

So the fact that the prime minister has decided to go to parliament, they've held a series of indicative votes, parliaments taking control of the agenda, now she's discussing with the leader of the opposition if they can come to some kind of agreement around a soft Brexit.

She is trying lots of different avenues to come to some kind of agreement, which has broader support across the House of Commons. That is what's likely to occur if any positive resolution, if the U.K. is given more time.

Now, the mood music that coming out of those cross party talks with Labor has been positive, but there haven't been many signs of definitive progress being made. The prime minister has said that if Corbyn had come to some kind of agreement that she'll put forward Brexit scenarios to the House of Commons. Then if there's a majority for any of those, the government will be bound to act upon them.

So what we are seeing is a distinct shift from the prime minister trying to unify her party on a Brexit deal. She's now accepted by her actions that, that is not possible and reaching across the aisle, reaching out to all of the parties within parliament to try and find some kind of consensus that may will be around the customs union or potentially a confirmatory vote which she addressed in prime minister's questions today when asked by Ian Blackford if that's something that she's disgust with the Labour Party, she said that her position remains the same but left the door open for a second referendum vote again in Parliament.

QUEST: All right, thank you, Bianca. It could be all night. And when we come back, Benjamin Netanyahu on the cusp of victory, a tight election in Israel will be in Jerusalem after this short break.

(COMMERCIAL BREAK)

[12:41:18] QUEST: A tense day in Brussels. Behind me, a crucial summit is now underway. It is going to discuss and decide the future direction of Brussels' approach for Brexit. Now before the summit, Chancellor Angela Merkel told lawmakers a longer Brexit extension is possible but the U.K. must meet the European Union's expectations.

(BEGIN VIDEO CLIP)

ANGELA MERKEL, GERMAN CHANCELLOR (through translator): Tonight, we will discuss granting Great Britain more time and, of course, we also have our expectations. This means above all of that, the European institutions must be able to function without disruption. This includes the European elections in May in Great Britain, as well as the readiness to constructively cooperate with E.U. decision making.

(END VIDEO CLIP)

QUEST: Now, joining me tonight here in Brussels is Bernd Koelmel, a German member of the European Parliament. Good to see you, sir. Thank you.

And assuming that an extension is granted tonight and assuming that the U.K. agrees to take part in European elections, what problems do you foresee?

BERND KOELMEL, GERMAN MEMBER OF THE EUROPEAN PARLIAMENT: I think first we should remember to a saying on Albert Einstein he said during every time is the same and to expect every time different results, that's a kind of maintenance.

And at the moment, we are going in this direction with our Brexit negotiations. I think, yes, in the evening we will have an extension but an extension is only a tool and not a solution, though, I think it's really urgent to rethink the future of the E.U. At the moment, the Brexit discussion covers the future of the E.U. We have to decide which E.U. do we want?

Do we want to have an E.U. super state or do we want to have an E.U. which a sovereign member state which are responsible for all what not the E.U. can do better, this is really question. And to answer this question leads really to a position to have perhaps in new referendum on a new basis that we need a new deal not only for U.K., we need a new deal for the whole E.U. That's my opinion.

QUEST: Now, you're going to get that to some extent with a new commission that will take office in the middle of the year. But to the U.K.'s point, I mean, what do you want to -- it's a bit of a mess because the seats, the U.K. seats had already been puzzled out to other people and you can't just simply increase the number. And anyway, are you in favor of the U.K. getting a commissioner even if it's just for short period of time?

KOELMEL: Yes, of course. I think if the U.K. stay in the E.U., then we have to give them their whole rights as other member states. And this shows I think the danger of an extension without a clear plan and we are all missing this plan.

We have to expect that minimum, the half of the seats, are going to Euro skeptical parties in U.K. and this will make the position of the whole parliament very complicated with a lot of effect for election of the next commission president and so on.

[12:45:04] So I think it's not a good idea to have only an extension without a clear plan. And I repeat, a clear plan should be the E.U. should offer better conditions for U.K.

QUEST: Bernd, it's good to see you, sir. Thank you. Thank you for joining us. I appreciate it.

Now, here are the stories across in the world tonight. The elections in Israel, it appears that Benjamin Netanyahu's Likud party is tied for parliamentary seats with the blue and white party. A right-wing coalition, though, led by Netanyahu's Likud could secure enough seats to form a government. President Trump says he's already called the Prime Minister.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'd like to congratulate Bibi Netanyahu. It looks like that race has been won by him.

I think we'll see some pretty good action in terms of peace. Look, everyone said, and I never made a promise, but everybody said you can't have peace in the Middle East with Israel and the Palestinians. I think we have a chance and I think we have now a better chance with Bibi having one.

(END VIDEO CLIP)

QUEST: Israel's president is to begin consulting next week with all parties that one seats. Moving ribbon (ph) will ask the party leaders who should get the chance to form a government. He's expected to turn to Netanyahu first and he has roughly six weeks to put together a deal. In Jerusalem, Oren Liberman is there.

This is an extraordinary result isn't it in many ways, particularly both men claimed lead, claimed that they'd won last night. So in Israel tonight, you know, 24 hours later, if you like, how is the hangover?

OREN LIEBERMANN, CNN CORRESPONDENT: Well, from the perspective of history, this is no doubt a historic election for Prime Minister Benjamin Netanyahu, a record fifth election. He'll become Israel's longest serving prime minister this summer.

Whether it's extraordinary, it depends almost on your perspective. You can look at it from -- he had corruption investigations hanging over him, the election polls, the exit polls all suggest that he was in serious trouble or you can look at it from the other perspective.

The economy is doing very well even if the cost of living is high. Security is pretty solid on a northern border even around Gaza where it looks like there are some sort of long-term agreements there.

And then, of course, Netanyahu has his foreign policy accomplishments, many of those things for President Donald Trump, but he has a good relation with Russian President Vladimir Putin as well and the leaders of other major countries, Brazil, India, China, Japan and he was happy to play all of that up.

So from that perspective, perhaps it shouldn't have been that surprising and Netanyahu although he had some nervous jurors there certainly playing off like this was the result he expected all along.

One more thing I will add, Richard, we just got a statement a short while ago from the other party and they have effectively conceded the election trying to frame it as the fight continues but they have said, "We concede the campaign of 2019. We are beginning the campaign of 2020."

QUEST: And what I told was interesting was the way in which, again, the blue and white have framed the debate that they did pick up so much support for, you know, an experienced prime minister. Even if he wins, he comes out of this election with a black eye and a bloody nose.

LIEBERMANN: That of course is how they have to frame. They try to walk away from this, looking as if they have accomplished something, almost the moral victory in instance. They did get more than a million votes and that is a stunning number in a country of only about some four million voters or so.

What they didn't really do is change the electoral map in terms of right-wing versus left-wing votes versus centrist. They couldn't put a dent in Netanyahu's right-wing coalition. And if you're going to try to beat him, you have to be able to do that at least a few seats. And it doesn't look like they were able to do that at all. QUEST: Oren, you alluded to it in your first answer, but it's worth going further on this point. And how did Netanyahu do it? He is reviled by many. He is under a deep cloud of a suspicion over a corruption. Some whites similarly, the admin -- his administration has had numerous questions. How did he do it?

LIEBERMANN: Well, for the corruption investigations which are still hanging over there, for the last two or three years he's been working on delegitimizing them, calling them a media led witch hunt and that worked with his constituency. But amongst other voters and amongst many Israelis, he simply played up his foreign policy accomplishments and he's been on the foreign policy stage for 10 years.

He had Israel's economy behind him. He's taking credit for that and Israel with its high tech the economy itself is doing quite well. And then, of course, he's always had the aura of Mr. Security. And not even three defense ministers and chiefs of staff in his rival party could wrestle that away from him.

[12:50:03] So for those who like him, they like him even more, especially before and after this election. Even some of those who are his detractors say, "Look, we don't like him, we're still voting for him." It's a difficult country to run and he has managed not only to run the country, but also to handle Israel's foreign policy in an exemplary way.

Crucially, one of the big issues here, of course, historically big issues, the Israeli-Palestinian conflict, that was barely a blip on the radar and so it didn't affect Netanyahu at all that he walked away with a very close neck and neck race with the easier path the victory for coalition.

QUEST: Oren, thank you. You're giving us another quote for the night, a difficult country to run. Well, we might say the same thing about where I am here in Brussels tonight, a difficult organization to manage and we get an example of that tonight.

Theresa May asking the E.U. for a further Brexit extension. Will the French say no? We'll have more on that in a moment.

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QUEST: U.K. is asking for a Brexit extension to June the 30th. President Macron of France is reluctant to grant it without conditions to restrict, restrain the U.K.'s influence in the E.U.

Pierre Sellal is the former French Ambassador to the E.U. joins me now from Paris. Sir, thank you for taking the time to join us, the issue of what the French will extract as the price for an extension, what do you think it will be?

PIERRE SELLAL, FORMER FRENCH AMBASSADOR TO THE E.U.: I don't know if the price is a good work to describe the situation. In fact, let me just first remind that you can't consider that as granted the principle of deciding a new delay. Why? First, because they are holding the treaty, the famous Article 50, which says that the negotiations are to be completed in two years.

Second, the date itself was in fact decided by the British government itself, when it's decided to trigger the mechanism of Article 50 that means that after two years the processes are to be completed.

And then as you remember two weeks ago, first ordinance was decided by the European Council and the 27 decided that in order to consider the possibility of a new delay, a new report, we need to have new elements. And so I think the first step is for asking Mrs. May, the prime minister, to explain what is in of you the way forward from there.

[12:55:07] QUEST: But in your view, it's unthinkable that the 27 would refuse an extension thus forcing a hard Brexit, a clever Brexit. It's really just a question of how long that extension.

SELLAL: Yes. I think nobody wants to have Brexit, a Brexit without a withdrawal agreement, because we all know what will be the negative effects, the disruptions, et cetera. And France is directly concerned whether the fish industry, for instance, or the regions is an over trends. It's a very sensitive question.

At the same time, we need to have in mind the consequences of a new delay and, in particular, if it would be for a very long period of time, that's means to prolong the certainty and you know that the uncertainty for the people, for the citizens, for the business is something which is negative. So, we need to strike the right balance between these difficulties.

QUEST: Pierre Sellal, thank you for joining us. It's much appreciative from Paris tonight.

In the remaining minutes, Bianca, you've been listening the evening could go late, but it looks some sort of deal will be made?

NOBILO: Yes. Richard, I struggle to hear that last part of what you said, but I terms of what I'm hearing here about what's expected to come out of Brussels today, it's quite startling how many members of Parliament are curious to see what we know more than they do about the discussions that are going on, which tells us two things.

First of all, the fact that the E.U. holds all of the power here and they understand that the discussions are ongoing and that as Erin and you have been pointing out is not foregone conclusion.

The second thing, of course, being that the Prime Minister despite having matched with the influential Backbench Committee, the 22 committee that have the power to depose earlier in the week and speaking to M.P.s and having these listening exercises has not communicated to members of Parliament exactly what she's going to be doing in various different scenarios.

So depending on what the E.U. presents her with, how she's going to respond to that tonight in Brussels. So there is confusion and people over this side of the channel are just waiting to take the queue from Europe. QUEST: Bianca, thank you. And that is "The Express." Our coverage continues of the Brexit summit. I'll have the news headlines next.

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