Donald Tusk, president of the European Union (EU), speaks during a news conference. (Photographer: Dario Pignatelli/Bloomberg)

U.K. Future in Dublin's Hands Amid Brexit Scramble, EU Says

(Bloomberg) -- European Council President Donald Tusk threw his weight behind the Irish government on Friday, saying the European Union will be led by Ireland when it comes to assessing the U.K.’s proposal on avoiding a border on the island after Brexit.

“If the U.K.’s offer is unacceptable for Ireland, it will also be unacceptable for the EU,” he told a news conference in Dublin. “This is why the key to the U.K.’s future lies in some ways in Dublin .”

U.K. Prime Minister Theresa May is working against the clock to find a way of avoiding a policed border on the island after Brexit, without alienating the Northern Irish party that props up her government in London. Only when the EU accepts the U.K.’s proposed solution will Brexit negotiations move on to the trade talks that Britain wants to start this month.

Irish Foreign Minister Simon Coveney said Friday a breakthrough is possible in coming days. Optimism is growing in some circles, with one European official placing the chances of progress this month at 65 percent, though cautioning that the deal may not be finalized until the eve of a European summit on Dec. 14.

No Betrayal

May needs to find an apparently impossible compromise to meet the conflicting demands of Dublin and Belfast. 

The Northern Irish Democratic Unionist Party has publicly threatened to bring down her government if she gives in to the Republic of Ireland’s demands. But privately, an official familiar with the party’s thinking said they are relaxed about the situation, and see no signs that May is about to betray them.

The almost invisible border that was part of the peace process in Ireland was only possible because Ireland and the U.K. were both members of the EU and its single market. The U.K.’s plan to leave means some kind of policed barrier will have to go up as the line between the two becomes the U.K.’s land frontier with the EU. Ireland’s proposal for open access would mean Northern Ireland sticking to the EU rulebook – a red line for the DUP whose raison d’etre is to keep the enclave as part of the U.K.

Irish Prime Minister Leo Varadkar said he wants a deal but is prepared to “stand firm” to make sure the island isn’t divided by a border that could undermine the principles of the Good Friday Agreement that put an end to decades of violence. The next “couple of days will be crucial,” he said.

The U.K. is pushing back against EU demands that it needs to put its offer on the table by Monday, when May is due to meet European Commission President Jean-Claude Juncker for lunch. 

Dublin has signaled it doesn’t see Monday as a cut-off, and an EU official said there could be flexibility around the deadline set by Tusk, although the U.K. will not be allowed to make an offer at the 11th hour before the summit on Dec. 14. 

The EU is set to assess the U.K.’s progress on Dec. 6, two days after May’s lunch with Juncker, in time to prepare a formal announcement on whether negotiations can move on to trade at the mid-month gathering of leaders. 

With an outline agreement on the divorce bill in place and progress made toward a deal on citizens’ rights, the Irish border is the main sticking point in Brexit negotiations. Talks on trade and the terms of a transition arrangement that businesses are keen to secure won’t be allowed to begin until “sufficient progress” is made on all three issues.

If that doesn’t happen by the time of the European Council summit, some British officials fear the future of the negotiations will be in danger, raising the prospect that the U.K. could crash out of the EU with no deal.

©2017 Bloomberg L.P.