EU Ready to Consider Major U.K. Concession on Irish Backstop

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(Bloomberg) --

European Union governments have discussed giving the U.K. a major concession on Brexit by possibly time-limiting the contentious backstop mechanism for the Irish border, two people familiar with the matter said.

A time limit -- something the EU has long said was out of the question -- would only be on offer if the U.K. accepted a backstop which would keep Northern Ireland in a customs union with the bloc. Prime Minister Boris Johnson, who is planning to reveal his own proposals this week, has said he won’t allow the U.K. to be trapped in the backstop, which was agreed to by his predecessor Theresa May but opposed by the British Parliament.

The discussions on a time limit haven’t found their way into the negotiating room but have taken place between major EU capitals including Paris and Berlin, one of the people said. Any backstop concession could only come if the U.K. and EU could rebuild trust -- which has taken several knocks in recent weeks. It wouldn’t be the starting point of a new negotiations, according to the second person.

“The EU is not considering this option at all,” a European Commission spokesman said. “We are waiting for the U.K. to come forward with a legally operational solution that meets all the objectives of the backstop.” An Irish government spokesman said it hadn’t been discussed.

The pound jumped as much as 0.4% to its highest level of the day. It later erased gains.

With Johnson vowing to take the U.K. out of the EU at the end of October with or without a deal, time is tight to get an agreement. The Irish border issue has dogged negotiations for more than two years, with Johnson refusing any measure that would treat Northern Ireland significantly differently to the rest of the country.

Johnson toughened his rhetoric again on Tuesday, saying there would have to be customs checks somewhere on the island of Ireland as a consequence of Brexit. He said the EU’s demands were to blame for that.

EU officials were alarmed by his comments and want to try to encourage him to engage with the backstop. Unless Johnson comes with a workable plan, they won’t offer any concessions, they said.

British Position

British negotiators have in the past suggested a time limit to the backstop, but this was always ruled out by the EU. On Monday, one of Johnson’s allies, the leader of the Northern Irish Democratic Unionist Party, said she would consider a time limit on the backstop. Johnson himself is not opposed to the idea, according to a person familiar with the matter.

Since the backstop, designed to prevent a hard Irish border, was first drawn up in early 2018, the EU has said it could never be time-limited because it’s supposed to act as an insurance policy. It would be replaced by other arrangements if and when they are ready, or by a future trade deal that would make any other mechanism to prevent a hard border unnecessary.

The U.K. has previously suggested that a time limit on the backstop would help the deal pass a vote in Parliament. During the course of last year’s negotiations, the backstop was altered to cover the whole of the U.K. rather than just Northern Ireland but the latest ideas would appear only to apply if Johnson reverted to a backstop covering the region only.

Any time limit granted by the EU could be linked to giving the Northern Ireland Assembly a say in whether the region remains in the backstop, the people said.

Johnson’s refusal to accept the idea of the backstop suggests the EU concession won’t come into play, but it could do if the U.K. softens its stance, the people said.

Any concession to the U.K. on a time limit would have to be accepted by the Ireland’s government. An EU diplomat said it was unlikely Irish Prime Minister Leo Varadkar would accept it.

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