Picture: REUTERS
Picture: REUTERS

Brussels — The UK and the EU are working against the clock to reach a compromise on the Irish border that will allow a breakthrough in Brexit talks at a key meeting next week.

Prime Minister Theresa May needs to find a way of wording a commitment to the EU that Brexit will not mean a hard border goes up between Northern Ireland and the Republic of Ireland, when the 482km line dividing them becomes the UK’s new frontier with the EU.

Her government is talking to Dublin and Northern Ireland’s Democratic Unionist Party, to find a solution by Monday — the deadline all sides are working towards.

Reiterating commitments to the Good Friday Agreement that brought peace to Ireland after decades of violence could be part of the solution, according to four European officials. But Ireland is insisting on a written commitment that goes further, and makes sure regulations on each side of the border won’t diverge significantly after Brexit, one of the officials said.

Negotiators have reached a preliminary agreement on the financial settlement Britain will pay when it quits the EU, a person familiar with the situation said on Tuesday. That leaves the sensitive question of the Irish border as the main obstacle in separation talks.

The pound continued to strengthen on Thursday on hopes of a breakthrough in divorce talks, which have shown little progress for months. The Times of London reported that a deal on the Irish border was close, and the EU would offer a transition deal for the period after the divorce as soon as January.

"In the same way as we have seen movement in the last 24 hours in relation to the financial settlement, I expect that we will see movement in this regard in the next few days as well," Ireland’s EU commissioner Phil Hogan told reporters in Brussels on Wednesday. "And hopefully we will."

Businesses are desperate for negotiations to start on the transition deal that Britain wants to put in place after Brexit and also for talks to get going on trade — where the real battle begins. The EU won’t discuss its future relationship with the UK until it’s satisfied on the issue of the rights of citizens, the so-called Brexit bill and the Irish border.

Thanks to the EU and its single market, the border now is virtually invisible, with animals, goods and people crossing it freely. Brexit will mean a border probably has to go up somewhere as the U. plans to leave Europe’s single market and customs union, and also plans to strike trade deals with countries such as the US

Key Ally

Ireland wants no border at all — for historic, political and economic reasons — and the EU has adopted the same stance. But no border means keeping Northern Ireland aligned with the regulations that apply in the Republic, and that would effectively mean erecting a border between Northern Ireland and mainland Britain. The Northern Irish DUP considers that a red line, and its view is more important than ever as its legislators prop up May’s government in London.

The chances of an agreement on the Irish issue by next week are 50-50, according to one European official, and 60-40 according to another.

On Monday, May has lunch with European Commission president Jean-Claude Juncker and is expected to present the formal offer on the divorce bill and Ireland. If EU governments accept it, the next step is for them to declare at their December 14 summit that talks could start on the future relationship between Britain and its biggest trading partner.

"We’re all of one view that we don’t want to see –-that’s the parties in Northern Ireland, the Irish government, the UK government — that we don’t want to see a hard border," May told reporters on the aircraft to Amman, Jordan, as she began a two-day visit to the Middle East. "There are a number of ways in which we can ensure that for the future and look forward to having more detailed discussions on that as we move into phase two of the negotiations."

Irish Europe affairs minister Helen McEntee said on Wednesday that Ireland did not want to be obstructive but that there needed to be an agreement on the border issue and she had not yet seen the wording on guarantees. Prime Minister Leo Varadkar said the situation was "rapidly evolving".

At home, May can at least take comfort from the muted response to the news of an agreement on the hefty divorce bill that Britain will pay to leave the EU. The tabloid press that loves to loathe the EU was distracted with news of Prince Harry’s engagement, and Conservative Brexit-backers kept a low profile. That’s crucial for May’s chances of clinching a deal at the summit.

Chief negotiator Michel Barnier was cautiously optimistic.

"I hope I can report to the European Council that in the meeting we have been able to negotiate that deal — and that we have reached a very important step in our relations, if we find this very important point in the agreement in the next days," he said in Berlin. "We are not there yet."

Bloomberg

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