EU Signals Brexit Optimism as Both Sides Target Deal by Midnight
(Bloomberg) -- The European Union struck a more optimistic tone about the prospects of a Brexit deal on Tuesday after the U.K. sent revised proposals in a bid to meet a midnight deadline.
As the hours tick down, officials from the two sides worked late into Monday night in Brussels and resumed early this morning, racing to wrap up an agreement for leaders to rubber stamp at a summit this week.
If a deal is reached, Prime Minister Boris Johnson can present it to the U.K. Parliament on Saturday and avoid having to seek another delay beyond Oct. 31.
“Even if an agreement will be difficult -- more and more difficult to be frank -- it will still be possible this week,” Barnier told reporters in Luxembourg Tuesday morning before a meeting with ministers from EU governments. “Reaching an agreement is still possible.”
The pound rose toward a three-month high versus the dollar, gaining 0.5% to $1.2663 as progress in the talks fueled optimism in the market. When officials said last week they could see a “pathway” to success, sterling delivered its best two days in a decade.
The U.K’s proposals are shrouded in secrecy but the focus is on Northern Ireland’s relationship to the EU’s customs union and the degree to which checks can be eliminated on goods crossing the Irish border, a scene of violence for decades until the late 1990s. The U.K. is trying to prove that there’s no risk of sub-standard goods entering the EU’s single market, an EU official said. The EU has also made concessions, a U.K. official said.
Barnier said that there must be conclusion by the end of Tuesday to give the EU’s 27 remaining governments time to assess any agreement before the summit that starts in Brussels on Thursday afternoon. Johnson also wants a deal by Tuesday night, the U.K. official said.
While EU diplomats said that Barnier sounded cautiously optimistic in their behind-closed-doors meeting in Luxembourg on Tuesday morning, they also emphasized that there is clearly still a lot of work to do.
If things go well, it’s possible negotiators might have a draft legal text on Wednesday. If they don’t, talks could still continue, pushing leaders to hold an emergency summit before the end of the month.
After weeks of deadlock, hopes of a deal were revived last week after Johnson held talks with Irish counterpart Leo Varadkar, who is crucial to any agreement. For the British premier, an agreement this week would allow him to honor his pledge to deliver Brexit on Oct. 31, boosting his standing ahead of a likely election.
“Today is a key day,” Irish Foreign Minister Simon Coveney told reporters in Luxembourg. “I don’t want to raise expectations, but later on today or this evening,” if there’s going to be a deal for this week’s summit, “a big step forward needs to happen today.”
An official from the French government said the U.K. had presented a “serious proposal.” Johnson held a 20-minute phone call with French President Emmanuel Macron on Tuesday morning that had been “constructive,” Johnson’s spokesman James Slack said.
--With assistance from John Ainger.
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