Michel Barnier, chief negotiator for the European Union (EU), right, speaks as Dominic Raab, U.K. exiting the European Union (EU) secretary, listens during a news conference in Brussels, Belgium. (Photographer: Yuriko Nakao/Bloomberg)

U.K. and EU Drop October Deadline for Brexit Deal

(Bloomberg) -- Follow @Brexit on Twitter, join our Facebook group and sign up to our Brexit Bulletin.

The U.K. and the European Union still say in public they want a Brexit deal wrapped up in the next seven weeks. Behind the scenes, though, senior officials on both sides admit this is unlikely.

They now aim to finalize divorce terms by the middle of November at the latest, according to people familiar with the British and European positions, who spoke on condition of anonymity as the discussions are private.

The longer timeframe is another indication that negotiators are struggling to make headway, and the risk is that the closer talks run to the U.K.’s exit on March 29, the greater the chance that there won’t be a deal. The EU summit beginning Oct. 18 had been earmarked as the deadline, after earlier hopes of resolving the divorce by June faded away.

A November deadline would imply the EU calling an emergency summit during that month, though an EU official said there was no firm plan to do so yet. Leaders are due to discuss Brexit at a summit in Salzburg in the middle of September and then again at the October meeting in Brussels.

A gathering of center-right European leaders, including German Chancellor Angela Merkel, EU President Donald Tusk and the bloc’s Brexit negotiator, Michel Barnier, in Helsinki in early November could provide an important opportunity to assess the situation shortly before the crunch.

United Stance

British Prime Minister Theresa May’s team also believes the EU will want to wrap up a Brexit deal in order to form a united front with the U.K. when leaders meet President Donald Trump at the Group of 20 nations summit at the end of November.

If the deadline is pushed back again into December or January, both sides would face perilous choices over whether to give ground or give up on talks.

“As Parliament returns from its recess on Monday, Brexit is finally moving towards crunch point,” Eurasia Group’s Mujtaba Rahman said in a note on Wednesday. He said some British officials expect the deadline could slip even further -- to the summit of EU leaders starting on December 13. “There is now an acceptance in both Brussels and London that the target of reaching agreement by the 18-19 October EU leaders’ summit will definitely be missed.”

Negotiations have been painfully slow since an agreement on a transitional period was reached in March. The two sides remain far apart on the thorniest subject: how to guarantee there will never be a hard border between the U.K. province of Northern Ireland and the Republic of Ireland. Even so, British officials insist they’re “confident” of getting a deal.

“We’re working to the October deadline,” May’s spokesman, Greg Swift, told reporters in London on Tuesday. “Both sides have agreed to increase the pace of negotiations. That’s what we’re doing.”

Speaking after a meeting with U.K. Brexit Secretary Dominic Raab last week, Barnier wouldn’t commit to October as the deadline for the completion of the accord. But he reiterated it couldn’t be much later than that -- “well before the end of the year.”

According to a report on Wednesday in the Guardian, Raab is growing frustrated with Barnier’s lack of availability for negotiations, despite the Frenchman’s promise to be available “24-7” for talks.

U.K. diplomats complained that the commission’s repeated claims, made again by a spokesman on Tuesday, that Barnier was available for high-level talks at any point, night or day, had proven to be “hyperbole.”

Achieving a divorce deal in the fall is seen as vital to allow enough time for the British and European parliaments to ratify the accord before Britain legally leaves the bloc. The lack of progress has weighed on the pound in recent weeks, amid warnings from senior ministers that Britain risks crashing out of the EU without any agreement.

©2018 Bloomberg L.P.