Boris Johnson's Brother Resigns From Government: Brexit Update

(Bloomberg) -- Prime Minister Theresa May is edging toward a Brexit deal. But glitches keep emerging. The time stamps are London time.

Key Developments (5:30 p.m.)

* The Northern Irish party that props up May says it can’t support the concessions she’s making to get a deal
* EU member states are said to have concerns, and trying to put the brakes on
* Jo Johnson, a minister, resigned and called for a second referendum

Some Progress, But Lots of Disagreement (7:50 p.m.)

EU ambassadors were told that there’s convergence on what the customs arrangement for the Irish backstop should look like, but the Commission is unsure whether May has backing for it from her Cabinet, according to a person familiar with the situation. There’s also convergence on how a review mechanism might work. But there are disagreements about some of the accompanying measures -- such as keeping the U.K. aligned with EU rules.

There’s also disagreement on the political declaration about the future relationship, according to the person.

November or Not? (6:30 p.m.)

If there’s going to be summit in November to get the Brexit deal signed off, there needs to be progress in the next week. That’s the view of the European Commission, which briefed representatives of the EU member states on Friday, according to people familiar with the situation.

A deal is still possible next week, but there are lots of outstanding issues, they were told.

EU Said to Ask U.K. For More Concessions (6:05 p.m.)

The European Commission, which is leading negotiations, told representatives of the 27 member states that the U.K. needs to move more on the Irish backstop, according to two people familiar with the situation who declined to be named.

Work is set to continue over the weekend.

One resignation, more to come? (4:02 p.m.)

Jo Johnson -- brother of the more famous Boris -- has resigned from the government, where he was a transport minister. He was not in the Cabinet, but it’s warning that more resignations could come as top ministers pore over May’s latest plan. His departure adds to doubts about whether May will be able to get her Brexit deal past Parliament -- the arithmetic was already looking tricky.

“It has become increasingly clear to me that the withdrawal agreement, which is being finalized in Brussels and Whitehall even as I write, will be a terrible mistake,” Johnson said in an article.

Johnson, who voted Remain, said the best way out was a second referendum, as the other options -- the current deal, or crashing out without one -- were unacceptable.

"To present the nation with a choice between two deeply unattractive outcomes, vassalage and chaos, is a failure of British statecraft on a scale unseen since the Suez crisis," he wrote.

Reasonable Optimism Around Deal (3:55 p.m.)

“Reasonable optimism” remains that a deal can be brokered between the two sides despite the latest furor over the DUP, according to a European official familiar with the talks. The official puts the chances of breakthrough this month at about 50:50. The bigger worry surrounds Theresa May’s ability to force the divorce accord through Westminster, according to the official. Once it becomes clear exactly what the U.K. will have to agree to win a customs deal, that might become significantly trickier.

At this point, there’s no plan to offer the DUP additional comfort, with the official suggesting that’s a matter for the U.K. government. One school of thought emerging in European circles is that May will mirror EU rules across the U.K., lessening the need for checks in the Irish Sea, to use the phrase that enrages the DUP.

Governments Putting the Brakes On? (3:10 p.m.)

Just as officials from both sides can see an end to the Brexit negotiations, EU diplomats are tempering the optimism. Some capitals are concerned that things may be moving too fast around the negotiation table, particularly as they haven’t had the chance to give major input for a while.

The biggest fear is that the rush to give Britain a U.K.-wide customs arrangement (and remember, that wasn’t originally on offer from the EU), has changed the conditions for a future relationship. With the British government desperate to strike an agreement sooner rather than later, EU countries now see their opportunity to extract more concessions, two diplomats said.

Meanwhile, there are still disagreements about the future security partnership.

So, according to two diplomats, waiting till December for a deal can’t be ruled out.

Two summits to get Brexit deal done? (1:40 p.m.)

Diplomats have discussed the possibility of two summits to get a deal done. The first one would be without May -- so that leaders of the remaining 27 countries can work out what more to ask for -- according to two people familiar with the discussions speaking on condition of anonymity as a decision has yet to be made.

Among the many complications for the two sets of negotiators as they design a U.K.-wide customs arrangement are the conditions the EU will impose on Britain for the privilege. Officials are still discussing how to ensure the U.K. can’t undercut the EU by watering down rules in areas such as competition law, state aid and environmental standards.

Some of these conditions will go in the divorce deal but others may still find their way into the accompanying declaration on the post-Brexit relationship. This could slow the Brexit agreement process as different countries make different demands, one EU diplomat with knowledge of the talks said. That declaration is far from complete, according to a second diplomat.

Lidington Says Deal Changes Parliament Dynamic (12.55 p.m.)

Asked how May can get a deal through Parliament given the tricky numbers, Lidington said the existence of a deal endorsed by 27 countries will change things. “That will create a new dynamic. It will no longer be a question of some hypothetical outcome. I think then people will need to ask themselves what it is that’s in the best interests of those who sent them to Westminster? I hope and believe that we can secure that majority in Parliament.”

Varadkar Says Deal Possible if People Stay Quiet (12.40 p.m.)

Irish Prime Minister Leo Varadkar said he believed a deal could be done in the next two weeks, but implied this wouldn’t be helped by too much public discussion. “We’re at a sensitive point,” he said at a joint press conference on the Isle of Man. “A successful outcome is not guaranteed. But I think it’s possible in the next couple of weeks . With that in mind, the less said, the better.”

U.K. Cabinet Office Minister David Lidington, sitting next to him, did his best to stick to that, repeating Britain’s headline position on Ireland and avoiding discussing detail.

Pushed on the DUP position, Varadkar said it was important to listen to them, but added that in Northern Ireland: “There are other political parties as well.”

DUP Says Can’t Support May’s Proposals (9 a.m.)

Sammy Wilson, a lawmaker for the Northern Irish Democratic Unionist Party, says the party can’t support the current Brexit deal as it treats Northern Ireland differently. The party, which props up May’s minority government, is seeking allies in the Cabinet. The current proposal "breaks the union," he tells Radio Ulster.

He declined to comment on whether they would seek to bring down the government. May always knew that her plan would anger these key allies -- she needs to find a way to bring them on board or she risks failing to get the deal she eventually signs through Parliament.

The Times reported earlier the details of a leaked letter from May to the DUP setting out what the Irish border backstop -- the key stumbling block in Brexit talks -- would mean for the province.

U.K. ‘Optimistic’ on Breakthrough Soon (8.04 a.m.)

Robin Walker, a junior Brexit minister in May’s team, sounds as positive as anyone in the British government has done recently about the prospects for a deal.

The two sides are close to a “breakthrough” in the talks, he said in interview with Germany’s Funke newspaper group. There’s agreement on “more than 95 percent” of the Brexit deal, according to Walker. That number chimes with previous comments from May.

“It would be in the interest of both sides if the deal could be reached at a special summit” this month, he said. “I am optimistic that Britain and the EU will achieve a breakthrough in the negotiations soon.”

DUP’s Foster Raises Alarm (7:10 a.m.)

May has written to Arlene Foster to tell her that the EU’s backstop -- the one that could carve Northern Ireland off from the rest of the U.K. - will be included in the divorce deal as an ultimate, last-resort guarantee, the Times reports. Foster, the leader of the Democratic Unionist Party that props up May’s government, says the letter raises "alarm bells."

Meanwhile Irish Prime Minister Leo Varadkar says the earliest chance for a EU summit to sign off on a deal is probably end-November, according to the Irish Times.

Coming Up:
*Diplomats from the EU27 meet the Commission at 4 p.m. Brussels time to discuss the latest from the negotiations
*May is in Belgium and France for WWI commemorations and will meet French President Emmanuel Macron for lunch
*U.K. and Irish politicians meet on the Isle of Man. Varadkar, and a representative of the U.K. government are expected to speak at a press conference at around midday.

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