Brexit deal prospects improve as EU and UK agree to continue talks

The chances of a Brexit deal improved last night after the European Union and the British government agreed to keep negotiations going this week in a final push for an agreement before a no-deal on January 31st.

European Commission president Ursula von der Leyen and British prime minister Boris Johnson spoke by telephone and afterwards issued a joint statement, saying they would "go the extra mile" in a bid to reach agreement.

The move to drop yesterday's deadline and keep the negotiations going came after Irish Government sources said some progress had been made over the weekend and sparked cautious optimism in Brussels and Dublin that a deal might after all be possible after a gloomy few days.

But Mr Johnson sought to dampen expectations that a deal was imminent, telling broadcasters that the two sides remained far apart on key issues and that no deal remained the most likely outcome. However, he said a deal could be done if the EU wanted it and he was happy to continue talking and to make progress where possible.

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Chief EU negotiator Michel Barnier is due to brief ambassadors on the state of the talks first thing on Monday morning before returning to European Commission headquarters to reconvene with his British counterpart David Frost.

“Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over we think it is responsible at this point to go the extra mile,” Ms von der Leyen said.

“We have accordingly mandated our negotiators to continue the talks and to see whether an agreement can even at this late stage be reached.”

The statement, jointly issued by the EU and UK sides, followed a phone call between Mr Johnson and Ms von der Leyen to discuss the state of talks. Both sides had indicated that Sunday would be decisive, with time running out to secure and implement an agreement before January 1st.

Caution

In Dublin, Government sources welcomed the news but expressed caution, pointing to significant differences between the sides. However, some sources in Dublin say that hardline noises out of London over the weekend may be a sign that Mr Johnson is preparing to do a deal, which he is likely to claim as a victory.

Speaking in Cork last night, Taoiseach Micheál Martin said “where there is a will there is a way” to reach an agreement.

“The real deadline of course is the end the year . . . but obviously the next few days are crucial in terms of the practicalities around giving effect to any deal that would be arrived at,” he said.

“In my view it is extremely important and it is an imperative that both sides do everything they possibly can to avoid a no-deal Brexit because a no-deal Brexit would be very damaging all round to the United Kingdom economy, to the Irish economy, to the European Union economy, to workers and businesses who need certainty and who need clarity and I think it is good that they are continuing with the talks.

“I do not underestimate the difficulties and challenges that face both sets of negotiators but in my view where there is a will there is a way.”

Sources close to the talks say significant technical work has been done and the overall structure of a deal has been agreed, but that it is hard to see how the remaining disagreements can be resolved without a further political shift towards compromise.

The EU wants to have recourse if British regulations change over time in a way that creates an advantage for UK companies over EU competitors. It is not agreed how market distortion could be measured, what authority could arbitrate a dispute or what sanctions would be available.

On fish, there remains stark disagreement over how much of the roughly €650 million annual catch in British waters EU boats will be able to retain or how much notice fishing industries would have to adjust.