A Brexit Deal Is So Close But It Could All Still Go Belly Up
Negotiators in Brussels and London this week have gone from optimism to dismay and back again.
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Over the past 24 hours, a Brexit deal has seemed exasperatingly near, only for a series of conflicting messages, denials and clarifications to muddy the waters.
But on the eve of a critical summit of European leaders, all the signs point to a growing determination to finally put to an end a divorce saga that has dragged on for more than three years. Both sides now just want to get this done, despite the devilry that remains, as always, in the detail.
Negotiators in Brussels and London this week have gone from optimism to dismay and back again, with the pound twitching at every murmur. Hanging over all of their efforts is the prospect of a veto from the Democratic Unionist Party, the Northern Irish group that Boris Johnson needs to get his plans through the U.K. Parliament.
If the U.K. prime minister can emerge from Brussels with a deal on Friday night he’ll be heading straight to Westminster to tackle the monumental task of winning the approval of a House of Commons -- where he has no majority.
The man who became the face of Brexit during the 2016 referendum campaign needs to convince the DUP that he is not selling them out and to persuade Brexit true-believers that this is a real separation rather than a pointless fudge.
It is not clear -- even now -- how much backing his position has from DUP leader Arlene Foster.
Foster is a dogged negotiator who refused point blank to back the deal negotiated by Johnson’s predecessor, Theresa May, and as a result it was shot down three times in the House of Commons, ultimately ending May’s political career. Foster tweets rarely, but when an Irish broadcaster reported that she had caved, she swiftly dismissed it as “nonsense” leaving Brexit watchers wondering where things really stood.
While Foster is still keeping people guessing about her position, the die-hard Brexiteers who helped her to destroy May’s premiership are sounding like they could hold their noses and let Johnson’s deal fly.
“The deal sounds like it could well be tolerable,” said Steve Baker, who leads that faction in Parliament.
Concessions to the DUP
Johnson has been consulting with the DUP closely and the picture emerging suggests that one by one the issues that vex Foster are being tackled. At the core, Foster wants Northern Ireland to be treated the same as the rest of the U.K.
But Johnson has come to accept, and what helped unblock talks, is that there is going to have be some kind of border between Northern Ireland and the rest of the U.K. and some kind of creative arrangement that sees the territory leave the EU custom’s union while still retaining its rules.
The biggest issue, as technical talks continue into the night, is how to handle sales tax in Northern Ireland. That is likely to prevent a deal being announced Wednesday night. But conversations in London and Brussels suggest the deal is otherwise oh so close.
In a concession to Foster and her supporters, the Northern Ireland assembly will be allowed to hold a vote on whether to continue the arrangement for the border with the Irish Republic in six years time and every four years after that.
A Walk in the Park
The turning point, looking back, came a week ago when Johnson invited the Irish Prime Minister Leo Varadkar to lunch at a manor house in picturesque Cheshire. The circumstances even then were unusual with the location kept secret. When they returned from a stroll in the countryside, it was to announce they saw a “pathway to a possible deal.”
Since then negotiators have moved through the gears as the vibe suddenly changed. After months of rumblings about the worst-case scenario of a no-deal Brexit, talk shifted to creativity and goodwill and solutions. The pound has risen 5% against the dollar.
Even France’s Emmanuel Macron, who has relished the role of doom-monger at Brexit summits past, allowed himself a note of optimism. Standing alongside Germany’s Angela Merkel as they prepared for the summit in Toulouse, he said: “I want to believe that a deal is being finalized and that we will be able to see it tomorrow.”
Merkel, the ever-cautious chancellor, has routinely punted Brexit problems to the EU’s chief negotiator Michel Barnier. But on Wednesday she seconded Macron.
“We’re now in the final meters,” she said.
The meticulously-prepared Barnier, meanwhile, was getting ready to brief EU ambassadors in the morning, with a pile of paperwork and a view to wrapping everything up in the nick of time.
--With assistance from Patrick Donahue, Helene Fouquet and Dara Doyle.
To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net;Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net;Robert Hutton in London at rhutton1@bloomberg.net
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, ;Rosalind Mathieson at rmathieson3@bloomberg.net, Ben Sills
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