Ireland Urges Flexibility to Avoid a ‘Bad News’ No-Deal Brexit

(Bloomberg) -- Irish Foreign Minister Simon Coveney called on the European Union to be open-minded in negotiating with the U.K., warning that a no-deal Brexit would be “very bad news” for Britain as well as Ireland.

“The EU has always said that if Britain softened its red lines, it would show flexibility in return,” Coveney told reporters in London on Wednesday, referring to Prime Minister Theresa May’s post-Brexit blueprint for Britain’s relationship with the bloc. “We need to test that now.”

May finally put her preference for a soft Brexit into writing this month, including a proposed free-trade area in which British companies would comply with European market regulations for manufactured goods and agricultural and food products. The EU’s earlier draft guidelines for negotiations point out that the bloc could offer a more ambitious trade deal if the U.K.’s position softened.

Ireland Urges Flexibility to Avoid a ‘Bad News’ No-Deal Brexit

Coveney said negotiators must focus on whether Britain’s “asks” could be accommodated while allowing the EU to protect its interests in ensuring the integrity of the single market.

“I believe we can do that,” Coveney said, though he warned that some parts of her proposal would be “challenges” -- including a customs system in which British officials would collect EU tariffs at the U.K. border on goods destined for other countries in the bloc.

More Urgency

He also said progress must accelerate if the two sides are to meet their October deadline for an agreement.

In a BBC Radio interview earlier Wednesday, Coveney said Ireland would “absolutely” back any request by the U.K. to stay in the EU after March 2019 to give more time for negotiations. He later told reporters that Ireland would keep an “open mind,” but that it was still too early in the process to be trying to “buy time.”

Though senior European officials have previously privately questioned whether the talks will finish on time, Prime Minister Theresa May’s government has repeatedly ruled out postponing leaving the bloc. It is stepping up plans for a no-deal Brexit, with Brexit Secretary Dominic Raab warning on Tuesday of the need to ensure adequate food supplies if the U.K. doesn’t secure an agreement.

A move to extend the Brexit deadline, which Article 50 of the EU Treaty sets at two years after a formal notice to leave the bloc, would have to be requested by Britain and agreed to unanimously by the 27 remaining EU governments.

Power Struggle

But the U.K. has also said its preference is for a deal, and the prime minister’s decision to take full control of negotiations with the EU -- responsibility had been split with the Brexit Department -- is likely to have boosted her chances of getting one. From the EU’s perspective, it represents an end to the power struggle in the British government which had hindered progress.

Both sides want to strike a deal at the EU leaders’ summit in October, though talks have been held up while Britain came up with the blueprint for its future relationship with EU. There’s also still no agreement on how to keep the Irish border effectively invisible after Brexit.

A deal hinges on finalizing the details of a “backstop” plan to ensure there are no customs checks between Northern Ireland and the Irish Republic even if there is no overall trade deal. Coveney said an agreement on the border is still “possible,” though he didn’t give any details on current discussions.

“Nobody wants border infrastructure on the island of Ireland,” Coveney said. “This is not just about trade, it’s about something actually much more fundamental than that in terms of relationships and communities.”

He also criticized politicians for talking “inappropriately” about a no-deal Brexit, saying that both Britain and Ireland would “suffer the consequences.”

“We need to be focusing on the intensification of negotiations to try to find a way forward, as opposed to the tough stance some people feel they need to take in relation to the ‘do your worst, we can deal with a no-deal situation,”’ he said. “That isn’t going to solve this problem.”

©2018 Bloomberg L.P.