EU-UK deal inches closer with crucial days ahead

Cautious optimism has taken hold in talks between the European Union and United Kingdom after progress inched forward in recent days, leading both sides to agree to drop a Sunday deadline to allow negotiators to keep working towards a deal.

Sources close to the talks describe the outstanding differences as serious and difficult to overcome. But both London and Brussels have said they will not walk away from negotiations, and the serious economic damage that a failure would cause has focused minds with talks running late into the night.

Chief EU negotiator Michel Barnier is due to brief ambassadors on the state of talks on Monday morning before returning to European Commission headquarters the Berlaymont 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,” European Commission president Ursula 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.”

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The statement, jointly issued by the EU and UK, 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.

In a televised statement, Mr Johnson said serious differences divided the two sides and that viewers should continue to prepare for a no-deal outcome. But he said Britain would not walk away.

"I'm afraid we're still very far apart on some key things, but where there is life there's hope," Mr Johnson said. "We're going to continue to try. And we're going to try with all our hearts and be as creative as we possibly can but what we can't do is compromise on that fundamental nature of what Brexit is all about, which is us being able to control our laws, control our fisheries."

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 political shift towards compromise.

Three weeks

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. The UK is pushing for annual negotiations to determine quotas, something the EU rejects.

Under three weeks remain for any deal to be agreed and implemented. Any agreement would be certain to run to hundreds of pages, and would need to be translated into different languages so it can be scrutinised and voted on by the European Parliament.

There is growing frustration among MEPs, who say that at least six weeks would be required for this process. Lawmakers will on Monday discuss whether to plan for an emergency voting session on December 28th, or whether the parliament could refuse to vote on the deal if they have insufficient time to interrogate it.

The deal could be provisionally applied from January 1st, pending parliamentary approval. But the idea is controversial, as it would mean continued uncertainty until the final vote and many MEPs argue it diminishes the democratic process.