BRUSSELS (Reuters) – Prime Minister Theresa May and British companies are banking on European Union leaders granting a Brexit transition deal subsequent week however diplomats stated they may face disappointment until a impasse is damaged over the Irish border.
May’s spokesman stated on Thursday she remained “confident” of a deal that might reassure buyers that little will change in buying and selling with the bloc for round two years after Britain leaves subsequent March and till a brand new commerce pact might be agreed.
EU diplomats and officers stated talks have raised their hopes too that, with London anxious for a fast deal, the bloc’s leaders can endorse a transition at a Brussels summit on Friday.
But what some described as full stalemate on Irish border preparations dangers derailing any settlement.
“This whole thing could end in tears,” one senior diplomat stated. “British business might get a terrible shock.”
Asked about these issues, a British government supply conceded that there was nonetheless “a lot left to do”.
The EU is irritated by Britain’s refusal to simply accept within the draft withdrawal treaty the inclusion of a “backstop” answer to keep away from a disruptive arduous land border between EU member state Ireland and the British province of Northern Ireland.
Sterling has suffered earlier than when Brussels has warned transition deal can’t be taken as a right. It won’t develop into sure till the entire withdrawal treaty is ratified, most likely early subsequent yr, however Britain hopes for an interim EU dedication.
“No one will promise May a transition just like that,” a second diplomat stated after envoys from the 27 remaining states mentioned EU negotiators’ newest draft (bit.ly/2FCnGZ8).
“But there is something in the air, there is optimism. Cautious, but optimism. We want to use the fact that Britain wants the transition so much, we would hope many things will therefore move. We will stress the Irish issue.”
Another EU diplomat echoed that view, saying: “There is a lot of movement. All the rest can be sorted out. But unless Ireland is sorted out, there is no transition deal at the summit.”
Germany’s Brexit coordinator stated “a lot of progress” was being made. Some foresaw a attainable “fudge” of the Irish difficulty, as occurred to safe a primary interim accord final December.
Dublin insists London should settle for the “backstop” which the EU says May agreed to as a part of the interim deal in December. That would see the province successfully retained inside an EU-run customs space, remoted as consequence from the British mainland.
May, who depends on Northern Irish votes in parliament, has rejected that and stated higher options will have to attend for separate talks on future UK-EU commerce, as a result of begin this spring.
There has been progress this week in narrowing variations on such points as expatriate residents’ rights, copyright and nuclear cooperation. But EU negotiators are reluctant to present away leverage they consider they should minimize a last deal.
“We won’t just offer transition like that next week,” a fourth EU diplomat stated. “We would lose quite a lot of leverage, threat Ireland. But the most recent talks have lined floor. So we’d search for a wording to recognise that and lock that progress.
“To ship a optimistic sign forward. They will get it — in the event that they settle for our circumstances,” the diplomat added.
Negotiations are set for over the weekend and senior British representatives might be in Brussels on Monday and Tuesday.
May will attend the summit on Thursday, though Brexit won’t be formally mentioned. She could search assist towards Russia over the nerve agent assault on a Russian former spy in Britain.
Any Brexit transition deal might be mentioned by the opposite 27 leaders once they reconvene with out May the next day.
Additional reporting by Jan Strupczewski and Alastair Macdonald in Brussels and Elizabeth Piper in London, Editing by Alastair Macdonald and Catherine Evans