Brexit deal 'agreed,' two senior EU diplomats tell DW

European diplomats say a Brexit deal has been tentatively agreed. But EU governments could still reject any text that negotiators put forward.

EU and UK Brexit negotiators have tentatively agreed a free trade deal after nine months of negotiations, two senior EU diplomats told DW on Wednesday.

It comes after senior aides to European Commission President Ursula von der Leyen said earlier in the day thatboth sides "are in the final phase."

"An agreement is in the air," said one source close to the talks.

The bloc's chief negotiator, Michel Barnier, told MEPs on Tuesday that Christmas Eve was the final deadline to seal an agreement and avoid a possible short-term No Deal Brexit.

Ambassadors have been told to pencil in one final meeting for Thursday. But diplomats from the 27 member states urged caution.

Agreement hinges on fishing rights

Governments have not yet seen a copy of the text negotiated over the past nine months. They will need to sign off on any accord with the UK.

"It all depends on what has been agreed on fish," said a senior diplomat from a coastal state.

Fishing rights after Brexit have been one of the most contentious matters throughout the negotiations. British fisherman have long complained that they do not get a fair share of the stocks caught in UK waters by European trawlers.

Barnier admitted to MEPs on Tuesday night that leaders needed to step in and broker a compromise.

The issue is one of those "very political and very sensitive matters — but I can't resolve them at my level," Barnier told parliamentarians during a video conference, according to a leaked transcript obtained by DW.

Done deal?

British broadcaster Sky News reported that "the deal is done" but aides to David Frost told DW that the UK team is "still negotiating."

A UK government spokesman declined to comment on which outstanding issues were left to be thrashed out.

Sources close to Barnier say that rules preventing unfair competition and how to police a deal have largely been agreed.

Officials in Brussels worried that the UK would try and undercut European firms, gaining an unfair advantage over companies across the Channel.

If both sides fail to meet the January 1 deadline, it is unclear under what conditions trade would take place before a deal would eventually be approved.

Over the past few days, British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen have have been in contact by phone seeking to unblock negotiations.

Businesses on both sides are clamoring for a deal that would save tens of billions in costs.

A failure to reach a post-Brexit deal would lead to more chaos on Britain's borders with the EU at the start of 2021, when new tariffs by both sides would add to other impediments to trade.

German Foreign Minister Heiko Maas said the whole Brexit process would make EU citizens recognize the benefits of membership of the bloc.

"I think a lot of people simply took the advantages of EU membership for granted because they are so used to them," he said, responding to written questions posed by DW.

"But Brexit made crystal clear what advantages the EU represents: Freedom of movement, free trade and the ability to live, study or work wherever one wants."

"At the moment, I really don't see a majority of states that would be willing to give that up."

The UK and EU have been hoping to avoid further chaos at the border in last-ditch trade talks