Brexit deal faces Irish barrier

BRUSSELS: Prime Minister Theresa May and British businesses are banking on European Union leaders granting a Brexit transition deal next week but diplomats said they could face disappointment unless a deadlock is broken over the Irish border.

Ms May’s spokesman said on Thursday she remained “confident” of a deal that would reassure investors that little will change in trading with the bloc for around two years after Britain leaves next March and until a new trade pact can be agreed.

EU diplomats and officials said talks have raised their hopes too that, with London anxious for a quick deal, the bloc’s leaders can endorse a transition at a Brussels summit.

But what some described as complete stalemate on Irish border arrangements risks derailing any agreement.

“This whole thing could end in tears,” one senior diplomat said. “British business might get a terrible shock.”

Asked about those concerns, a British government source conceded that there was still “a lot left to do”.

The EU is irritated by Britain’s refusal to accept in the draft withdrawal treaty the inclusion of a “backstop” solution to avoid a disruptive hard land border between EU member state Ireland and the British province of Northern Ireland.

Germany’s Brexit coordinator said “a lot of progress” was being made. Some foresaw a possible “fudge” of the Irish issue, as happened to secure a first interim accord last December.

Dublin insists London must accept the “backstop” which the EU says Ms May agreed to as part of the interim deal in December.

That would see the province effectively retained inside an EU-run customs area, isolated as result from the British mainland.

Ms May, who relies on Northern Irish votes in parliament, has rejected that and said better solutions must wait for separate talks on future UK-EU trade.