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Brexit

Brexit hangs in the balance as EU doubts a deal this week

British Union Jack and EU flags are pictured before the meeting with Britain's Brexit Secretary Stephen Barclay and European Union's chief Brexit negotiator Michel Barnier at the EU Commission headquarters in Brussels, Belgium
British Union Jack and EU flags are pictured before the meeting with Britain's Brexit Secretary Stephen Barclay and European Union's chief Brexit negotiator Michel Barnier at the EU Commission headquarters in Brussels, Belgium Kenzo Tribouillard/Reuters via pool

A deal to smooth Britain's departure from the European Union hung in the balance on Monday after diplomats indicated the bloc wanted more concessions from Prime Minister Boris Johnson and said a full agreement was unlikely this week. 

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As the Brexit maelstrom spins ever faster, Johnson and EU
leaders face a tumultuous week of reckoning that could decide
whether the divorce is orderly, acrimonious or delayed yet
again.

Johnson says he wants to strike an exit deal at an EU summit
on Thursday and Friday to allow an orderly departure on Oct. 31.
But if an agreement is not possible he will lead the United
Kingdom out of the club it joined in 1973 without a deal - even
though parliament has passed a law saying he cannot do so.

EU politicians such as Irish Foreign Minister Simon Coveney
said a deal was possible and that much more work was needed. But
EU diplomats were pessimistic about the chances of Johnson's
hybrid customs proposal for the Irish border riddle.

"We are not very optimistic," a senior EU diplomat told
Reuters.

After more than three years of Brexit crisis and tortuous
negotiations that have claimed the scalps of two British prime
ministers, Johnson will have to ratify any last-minute deal in
parliament, which will sit in an extraordinary session on
Saturday for the first time since the 1982 Falklands War.

As EU ministers met in Luxembourg ahead of the leaders'
summit, Johnson's planned legislative agenda was read out by
Queen Elizabeth at the state opening of parliament.

"My government's priority has always been to secure the
United Kingdom's departure from the European Union on 31
October," the queen said from the House of Lords.

If Johnson is unable to clinch a deal, an acrimonious
divorce could follow that would divide the West, roil financial
markets and test the cohesion of the United Kingdom.

The pound was down 1% at $1.2517.

The main sticking point remains the border between EU member
Ireland and the British province of Northern Ireland: how to
prevent it becoming a backdoor into the EU after Brexit without
erecting controls that could undermine the 1998 peace agreement
that largely ended three decades of sectarian violence.

Brexit hangs in the balance

To get a done deal, Johnson must master the complexities of
the Irish border before getting the approval of Europe's biggest
powers and then sell any deal to the parliament in which he has
no majority and which he suspended unlawfully last month.

"Johnson doesn’t have a majority for anything in
parliament," one EU official told Reuters.

The details of Johnson's proposals have not been published
but are essentially a compromise in which Northern Ireland is
formally in the United Kingdom's customs union but also
informally in the EU's customs union.

The main sticking point from the EU side is customs. The EU
is worried it would be impossible to ensure goods entering
Northern Ireland do not end up in the EU and is concerned about
the complexity of a system for charging tariffs on goods moved
between Britain and Northern Ireland.

"Such a hybrid customs territory like the British are
proposing for Northern Ireland does not work anywhere in the
world, it seems," an EU diplomat said.

"With this kind of system, with two sets of rules for the
same goods crossing the same border, there is more possibility
for fraud and it's extremely complicated to distinguish between
goods heading for Northern Ireland, or further to Ireland and
the single market."

In a sign that the Brexit optimism which followed Johnson's
meeting with Irish Prime Minister Leo Varadkar last week may
have been premature, EU diplomats now say the best chance of a
deal would be to keep Northern Ireland in the EU's customs
union.

That would be a step too far for Johnson's Northern Irish
allies, the Democratic Unionist Party, and many Brexit
supporters in his party.

If he fails to strike a deal with the EU, a law passed by
his opponents obliges him to seek a delay - the scenario that EU
diplomats think is most likely.

"It's up to the Brits do decide if they will ask for an
extension," European Commission head Jean-Claude Juncker said in
an interview with Austrian media outlet Kurier.

Extension options range from as short as an extra month to
half a year or longer. The other EU states would need to agree
unanimously to grant it.

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