PM MAY DIVES INTO FLURRY OF DIPLO­MACY IN BID TO CLINCH BREXIT DEAL

Financial Chronicle - - AROUND THE GLOBE -

British Prime Min­is­ter Theresa May steps up at­tempts to court Euro­pean sup­port for a draft Brexit deal on Thurs­day as ne­go­ti­a­tions on se­cur­ing a smooth di­vorce from the world’s big­gest trad­ing bloc en­ter their fi­nal stages.

Less than five months be­fore Bri­tain is due to leave the EU on March 29, a deal is 95 per­cent done. But of­fi­cials have re­peat­edly cau­tioned they are still hag­gling over the fate of the land bor­der be­tween British-ruled North­ern Ire­land and EU mem­ber Ire­land.

The EU wants to see a break­through within a week if lead­ers are to en­dorse any Brexit deal in Novem­ber, of­fi­cial and diplo­matic sources told Reuters. An EU sum­mit ten­ta­tively sched­uled for Nov. 17-18 is no longer on the cards. Af­ter May dis­cussed Brexit with Ger­man Chan­cel­lor An­gela Merkel and Euro­pean Coun­cil Pres­i­dent Don­ald Tusk ear­lier this week, British min­is­ters were shown the text of a deal which is 95 per­cent agreed.

May will meet other EU lead­ers on Thurs­day in France and Bel­gium at com­mem­o­ra­tions to mark the 100th an­niver­sary of the end of World War One. She is sched­uled to have lunch with French Pres­i­dent Em­manuel Macron and din­ner with other lead­ers of the NATO mil­i­tary al­liance in Brus­sels.

The deal - or the lack of one will shape Bri­tain’s pros­per­ity for gen­er­a­tions to come and have long-term con­se­quences for the Euro­pean Union’s global clout.

Both sides need an agree­ment to keep trade flow­ing be­tween the world’s big­gest trad­ing bloc and the fifth largest global econ­omy. The other 27 mem­bers of the EU com­bined have about five times the eco­nomic might of Bri­tain.

DEAL OR NO DEAL?

Ever since the shock 2016 Brexit ref­er­en­dum sent ster­ling to its big­gest one-day fall in decades, the pound has been see-saw­ing on dif­fer­ing per­cep­tions of whether a deal will be done.

May told her cabi­net on Tues­day that more time was needed to clear the fi­nal hur­dle stand­ing be­tween her and a deal: the plan to en­sure no hard bor­der emerges on the is­land of Ire­land.

Some of her se­nior min­is­ters, such as Brex­i­teer Michael Gove, want to see the ver­dict of British govern­ment lawyers on how a post-Brexit plan for North­ern Ire­land’s bor­der might work. A North­ern Ir­ish po­lit­i­cal party, the DUP, which props up her mi­nor­ity govern­ment, wants the ad­vice to be pub­lished in full.

There is only a slim chance that an agree­ment be­tween British and EU ne­go­tia­tors can be reached in time to hold a sum­mit of lead­ers in Novem­ber to sign off the agree­ment, ac­cord­ing to one British of­fi­cial.

May wants a deal - both on a with­drawal agree­ment and a frame­work for fu­ture ties - be­fore year-end as she must get the deal ap­proved by the British par­lia­ment. The EU holds a reg­u­lar sum­mit on Dec. 13-14.

“We are not there yet. The clock is tick­ing. The choices need to be made now on the UK side,” EU ne­go­tia­tor Michel Barnier told re­porters on Wed­nes­day. “There are still im­por­tant is­sues out­stand­ing.”

If May fails to clinch a Brexit deal with the EU, or par­lia­ment votes down her deal, then Bri­tain would face leav­ing with­out a di­vorce deal, and thus with­out a tran­si­tion pe­riod.

British Prime Min­is­ter Theresa May walks along a rain wet street in Oslo, Nor­way, Tues­day Oct. 30, 2018, be­fore the Nordic Coun­cil ses­sion

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