LDN - Business

EU readies Brexit transition deal, Ireland seeks border assurance

[March 19, 2018] By Gabriela Baczynska and Alastair Macdonald

BRUSSELS (Reuters) - The European Union is close to offering Britain a deal on a post-Brexit status quo transition this week, EU diplomats said on Monday, as Ireland sought assurances any agreement would not let London water down pledges on its Northern Irish border.

Asked about a deal, EU negotiator Michel Barnier told reporters "We are determined" as he welcomed British Brexit Secretary David Davis to the European Commission. The two will speak at a news conference called for 12:45 p.m. (7.45 a.m. ET).

Brussels diplomats dealing with Brexit for the other 27 EU member states were also summoned urgently for a briefing shortly before Davis arrived and several of them told Reuters that they believed that a weekend of intensive talks had broken deadlock to allow EU leaders to offer a transition deal on Friday.

Afterwards, several diplomats said that the text of an agreement on transition had been agreed, along with the text of the draft treaty on expatriate citizens' rights and a financial settlement, and that there had been progress on the Irish issue.

However, it remained unclear whether Dublin was ready yet to give its blessing to EU leaders offering London a full political commitment to the transition deal when they meet on Friday.

"There is a deal on almost everything, also on need for backstop for Ireland," one EU diplomat said. "Details need to be hammered out."

Another said British Prime Minister Theresa May "seems likely" to get the summit approval of a transition deal.

"There is agreement on transition, citizens rights and financial settlement," the second diplomat said. "There is some progress on Ireland but it's not fully solved - there is agreement on the backstop but not all details."

A third said: "Member states are rather satisfied. We are still waiting for Ireland's reaction. Ireland will be discussed further, there is partial convergence of views."

Before his own meeting with Barnier, Ireland's main Brexit point man, Foreign Minister Simon Coveney, warned that Dublin wanted assurances from the EU that there would be "no backsliding" from London on an agreement in December that there would be no disruptive "hard border" on the island, if necessary by aligning Northern Ireland with the EU.

After the meeting, Coveney tweeted: "Brexit negotiations are moving forward - progress on Irish issues remains a key priority for both negotiating teams and solidarity with our EU partners remains strong."

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Ireland's Foreign and Trade Minister Simon Coveney and European Union's chief Brexit negotiator Michel Barnier arrive for a meeting in Brussels, Belgium, March 19, 2018. Olivier Hoslet/Pool via Reuters

Dublin is concerned at May's rejection of a "backstop" arrangement set out as a separate protocol in the EU's draft of the withdrawal treaty. Under this, Northern Ireland would effectively submit to EU economic rules and so become potentially isolated from the British mainland. The EU says May agreed to that potential outcome in December.

Britain argues that it has two other preferred outcomes for the Irish border, both dependent on agreement on future EU-UK trade rules. Negotiations on that will not start until next month, once Friday's EU summit gives Barnier the go-ahead. As a result, Britain is reluctant to give even a conditional nod to a draft treaty on Ireland that May says she could never accept.

EU diplomats said that it was likely that the draft wording on Ireland would not be agreed before May meets the other 27 leaders in Brussels on Thursday or before the 27 meet to agree a transition deal on Friday. However, London would need to assure its good faith on the border issue in order to get a transition.

Brussels is keen to give May a positive outcome this week, locking in an interim political accord that Britain would remain in most EU structures without a vote after it leaves next March until at least the end of 2020. That will not be legally binding until the full treaty is ratified early next year, however.

Other parts of the treaty are still being negotiated, including the controversial protocol on Ireland. It is not vital to conclude that before offering the transition, but Dublin and its EU allies are anxious not to give up a vital element of leverage on London before the border issue is settled.

Sterling jumped as optimism for a transition deal grew on Monday. The pound traded 0.54 percent higher versus the euro, its biggest daily gain since late January. The pound also broke through the $1.40 mark against the dollar and was up more than half a percent on the day.

(Additional reporting by Elizabeth Piper in London and Jan Strupczewski; editing by Philip Blenkinsop)

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