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European Union says still possible Brexit deal could be struck this week

WATCH ABOVE: 'We can't wait; let's get Brexit done,' U.K. PM Johnson says

European Union officials hoped to sketch out a Brexit deal with Britain within hours, but negotiations stretched into early Wednesday in the latest effort at producing an agreement in more than three years of false starts and sudden reversals.

The bloc said it might be possible to strike a divorce deal by Thursday’s EU leaders’ summit, which comes just two weeks before the U.K.’s scheduled departure date of Oct. 31. One major proviso: The British government must make more compromises to seal an agreement in the coming hours.

READ MORE: European Union says agreement on Brexit unlikely this week as deadline looms

Britain and the EU have been here before — within sight of a deal only to see it dashed — but a surge in the British pound Tuesday indicated hope that this time could be different. The currency rose against the dollar to its highest level in months.

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Even though many questions remain, diplomats made it clear that both sides were within touching distance of a deal for the first time since a U.K. withdrawal plan fell apart in the British House of Commons in March.

Still, talks that first lingered into Tuesday night turned into negotiating past midnight as no deal materialized between experts from both sides holed up at EU headquarters in a darkened Brussels.

Brexit at top of Boris Johnson’s priorities in Queen’s speech
Brexit at top of Boris Johnson’s priorities in Queen’s speech

Late Tuesday, Martin Schirdewan, a German member of the European Parliament’s Brexit Steering Group, said an agreement was “now within our grasp” following a breakthrough in negotiations.

This week’s EU leaders’ meeting — the last scheduled summit before the Brexit deadline — was long considered the last opportunity to approve a divorce agreement. British Prime Minister Boris Johnson insists his country will leave at the end of the month with or without an agreement, although U.K. lawmakers are determined to push for another delay rather than risk a chaotic no-deal Brexit.

Michel Barnier, the EU’s chief Brexit negotiator, said at a meeting of the bloc’s ministers in Luxembourg on Tuesday that the main challenge now is to turn the new British proposals on the complex Irish border issue into something legally binding. EU member Ireland has a land border with the U.K.’s Northern Ireland, and both want to keep goods and people flowing freely across the currently invisible frontier.

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READ MORE: Boris Johnson briefs Cabinet on last-minute Brexit talks as deadline looms

The big question is how far Johnson’s government is prepared to budge on its insistence that the U.K., including Northern Ireland, must leave the European Union’s customs union — something that would require checks on goods passing between the Britain and the EU, including on the island of Ireland.

The British government has given away little detail of the proposals it has made on that question; even government ministers have not been told specifics. In broad terms, the U.K. is proposing that Northern Ireland — but not the rest of the U.K. — continue to follow EU customs rules and tariffs after Brexit in order to remove the need for border checks.

But that sounds like a customs union in all but name — and would mean new checks or tariffs on some goods moving between Northern Ireland and the rest of the U.K.

An EU official said Barnier told a teleconference of some lawmakers that the Irish Sea would largely become the customs border between the EU and the U.K. That would avoid having a visible land border on the island of Ireland between the two. The official, who spoke on condition of anonymity because the negotiations were ongoing, said some complicated issues were still being fought over.

EU parliament head says “no progress” in Brexit talks
EU parliament head says “no progress” in Brexit talks

A frictionless border underpins both the local economy and the 1998 peace accord that ended decades of Catholic-Protestant violence in Northern Ireland. But once Britain exits, that border will turn into an external EU frontier that the bloc wants to keep secure.

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Barnier wants a clear answer by Wednesday morning, so EU capitals can prepare for the bloc’s two-day summit that begins Thursday. “It is still possible this week,” said Barnier. As so often, intricate details kept hopes from turning into immediate reality.

The big question is how far Johnson’s government is prepared to budge on its insistence that the U.K., including Northern Ireland, must leave the European Union’s customs union — something that would require checks on goods passing between the U.K. and the EU, including on the island of Ireland.

READ MORE: British, EU negotiators working through the weekend in hopes of striking Brexit deal

The British government has given away little detail of the proposals it has made on the issue; even government ministers have not been told specifics. In broad terms, the U.K. is proposing that Northern Ireland — but not the rest of the U.K. — continue to follow EU customs rules and tariffs after Brexit in order to remove the need for border checks.

But that sounds like a customs union in all but name — and would mean new checks or tariffs on some goods moving between Northern Ireland and the rest of the U.K.

An EU official said Barnier told a teleconference of some lawmakers that the Irish Sea would largely become the customs border between the EU and the U.K. That would avoid having a visible land border on the island of Ireland between the two. The official spoke on condition of anonymity because the negotiations were ongoing.

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But Northern Ireland’s Democratic Unionist Party, the party that props up Johnson’s minority government, strongly opposes any measures that could loosen the bonds between Northern Ireland and the rest of the U.K.

UK has provided ‘constructive’ Ireland customs checks proposals to EU : Boris Johnson
UK has provided ‘constructive’ Ireland customs checks proposals to EU : Boris Johnson

After DUP leaders met with Johnson late Tuesday at the prime minister’s office, the party said negotiations continued but “it would be fair to indicate gaps remain and further work is required.”

Brexit supporters are also wary that maintaining any kind of customs union with the EU will tie the U.K. to the bloc’s regulations and limit its ability to strike new trade deals around the world — undermining what were supposed to be some of the key benefits of a withdrawal.

The customs proposals on the table also appear similar to those put forward by former Prime Minister Theresa May. Opposition from pro-Brexit lawmakers, including Johnson, led to those being rejected by Parliament three times.

In public, Johnson has not changed his tune. But the British leader was working hard behind the scenes to secure a deal that would allow him to fulfil his vow to take the U.K. out of the bloc. And some of the staunchest Brexit-backers appeared willing to give him a chance.

“I am optimistic that it is possible for us to reach a tolerable deal that I will be able to vote for,” said pro-Brexit Conservative lawmaker Steve Baker.

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READ MORE: Brexit: U.K. and Irish leaders see ‘pathway to possible deal’ after private meeting

On Tuesday, Johnson called French President Emmanuel Macron — one of the EU leaders most skeptical about Britain’s intentions — to discuss where elements of a compromise could be found. Johnson’s spokesman, James Slack, called the conversation “constructive.”

Irish Foreign Minister Simon Coveney, who had a long, intense talk with Barnier early Tuesday, said the EU believes a deal “is difficult, but it is doable.” He said Barnier addressed EU ministers and “did point to progress in the last number of days where the gaps have been narrowed.”

Still, Dutch Foreign Minister Stef Blok said the British proposals to keep the Irish border protected from smuggling and fraud once it leaves the bloc were insufficient.

U.K. Supreme Court rules Boris Johnson’s suspension of parliament was unlawful
U.K. Supreme Court rules Boris Johnson’s suspension of parliament was unlawful

EU ministers insisted it was Johnson’s turn to make the next move — and he seemed to be listening. In addition to the call with Macron, Johnson shifted Britain’s weekly Cabinet meeting from Tuesday to Wednesday to give his ministers a better idea of Brexit progress.

If talks fail or stumble ahead of the EU summit, there could always be an extraordinary meeting just before the Brexit deadline — or it could be extended again. It has already been postponed twice.

“There will be progress tomorrow, the question is how big this progress will be,” said a senior German official, who briefed reporters on condition of anonymity in line with department rules. “Is this progress so great that work is still needed, but this work can be done in the next few days? Or is the progress such that two more months’ work is needed?”

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