EU Says Longer Transition Will Probably Happen: Brexit Update

(Bloomberg) -- Prime Minister Theresa May said she is weighing a plan that would keep the U.K. bound to European Union rules for longer to try to break the deadlock over the post-Brexit Irish border. Time stamps are Brussels time.

France to Keep Visa-Free Travel After Brexit (7:45 p.m.)

France won’t require U.K. workers and tourists to get visas to enter the country even in the event of a no-deal Brexit, President Emmanuel Macron said.

“We will not start visas,” Macron told reporters in Brussels after a summit. He added that those reporting the contrary were spreading “fake news, as some other leaders would say.”

Macron: Up to May to Come Up With Solutions (5:50 p.m.)

French President Emmanuel Macron said the path to a Brexit deal is now fundamentally down to the political situation in the U.K., and said it was up to May to come up with an solution to the Irish backstop. “It’s about the British political ability to find a presentable accord. It is not up to EU to make concessions for British internal political matters.”

He went on:

“We cannot find an accord that will revise the integrity of the single market, we cannot get an accord that will jeopardize the bloc of four freedoms, we cannot have an accord damageable to Ireland.”

DUP: Longer Transition Doesn’t Address Backstop (5:40 p.m.)

Nigel Dodds, deputy leader of the Democratic Unionist Party which props up May’s government, poured cold water on the idea of extending the transition period to resolve the dispute over the EU’s backstop proposal.

“An extended transition period means the United Kingdom continues to ‘pay but have no say’ in Brussels,” he said in an emailed statement. “Such an extension would cost United Kingdom billions of pounds, yet our fundamental problem with the EU proposal remains.”

The party wants a deal that respects the “constitutional and economic integrity” of the U.K.

How May Could Navigate Brexit Minefield (5:35 p.m.)

As the hunt goes on for a solution to break the Brexit impasse, the answer might lie in how negotiators and their lawyers can make the non-binding political declaration on future ties look more like a watertight guarantee, according to officials from both sides.

The aim is to use the political declaration to make clear that the so-called Irish backstop -- the politically toxic clause in the treaty that risks carving Northern Ireland off from Britain -- will never be used. May needs to convince her own lawmakers of this, and crucially her allies in the Northern Irish Democratic Unionist Party that props up her government.

So the focus now is on finding legally watertight language in the divorce treaty that cross references it to the political declaration, EU diplomats say. And the political declaration should include a clear enough indication of where things will end up to reassure lawmakers, a U.K. official said.

Read more: How U.K.’s May Might Chart Course Through Brexit Minefield

Austria’s Kurz Happy With ‘Unity’ (5:15 p.m.)

Austrian Chancellor Sebastian Kurz told reporters the unity among the remaining 27 EU nations “is still a given.”

“Everybody agreed that a hard Brexit must be avoided, and everybody agreed we should take the time we still need. That’s a question of weeks or months rather than days but it’s possible I think to reach deal if both sides want it.”

May: Nobody Wants Backstop to Be Used (5:12 p.m.)

Asked if she accepts the Irish backstop can’t be time-limited, May replied that it would only apply for a “matter of months” and that “nobody actually wants the backstop to actually be used.” The premier added that she wants the backstop dealt with in the future relationship.

May Didn’t Sound Confident on Parliament (5:06 p.m.)

May was asked if the deal would get through Parliament. And she didn’t express clear confidence.

“I am confident that we can achieve that good deal and when I take that deal back to Parliament, I will be asking MPs first to recall that we are delivering on the vote of the British people,” she said. “And I’d also ask them to think about the importance of protecting jobs and livelihoods in the U.K.”

May Convinced Can Secure Good Brexit Deal (5 p.m.)

“There are a few but considerable outstanding issues on the backstop,” May told reporters in Brussels, not least the fact that the EU proposal would effectively carve Northern Ireland off. “That’s unacceptable.”

“There will be more difficult moments as we enter the final stages of the talks but I am convinced we will secure a good deal in the interests of the U.K. and the EU.”

Juncker: Longer Transition Probably Will Happen (4:55 p.m.)

A longer Brexit transition period “probably will happen,” European Commission President Jean-Claude Juncker told reporters, calling it a “good idea” that would give “some room to prepare the future relation in the best way possible.”

More From Merkel (4:50 p.m.)

The German chancellor has finished her press briefing, describing the conundrum over the Irish border as “quite an intellectually fascinating task.”

“Time is running out, we know that,” she said. “And still the solution hasn’t been found. In the exit treaty, we’re still dealing with the question of how we deal with the Irish situation -- and this question can’t be fully separated from the question of the future relationship.”

Still, there were also some upbeat comments that will likely please May “I think that where there’s a will, there should be a way,” Merkel said. “I think there is a way.”

May to Hold Business Conference Call Friday (4:15 p.m.)

May’s office confirmed the prime minister will hold a conference call on Friday with business chiefs to answer their questions on Brexit. It will be a mixture of U.K. and international businesses of all sizes on the call, a press officer said. Officials couldn’t provide a list of invitees, or confirm a Financial Times report that 150 business leaders would be on the call.

Merkel: Brexit Is ‘Squaring the Circle’ (4:05 p.m.)

Merkel told reporters she regards Brexit as “squaring the circle” and that it’s unclear what the path to a resolution, though she did say: “Where there’s a will, there’s a way.”

“I was neither more pessimistic nor optimistic coming out of the meeting than when I went in,” she said. “We know that we didn’t achieve a breakthrough on the exit treaty.” The chancellor also said EU leaders didn’t discuss a no-deal Brexit scenario in great detail, and that their next meeting on Brexit will be “when more progress is made.”

Mordaunt Against Longer Transition (3:58 p.m.)

International Development Secretary Penny Mordaunt made it clear she wouldn’t accept any extension of the Brexit transition period.

Asked by ITV News if she supported the premier’s suggestion to extend the time frame, Brexit supporter Mordaunt denied May was even looking at it.

“That is not her position,’’ she said. “She has been very clear about when the implementation period would come to an end. This is about the rules in that implementation period. She knows we want to leave the EU, and we are going to do this as swiftly as possible to provide individuals and businesses with the certainty that they need.’’

Warning From Aerospace Lobby (3:55 p.m.)

Adding to complaints from the CBI about the pace of Brexit talks (1:45 p.m.), the U.K.’s aerospace lobby warned that the foot-dragging is harming the competitiveness of European industry and undermining future growth prospects.

“Further delay and uncertainty increases the damage to our economy, with investments on hold and contingency measures being implemented,” ADS Group Chief Executive Officer Paul Everitt said in a statement. “A disorderly Brexit is the worst possible outcome, and I urge the EU and U.K. negotiators to show the flexibility, agility and pragmatism required to achieve a timely and successful outcome. Time is running out.”

Is May Running out the Clock? (3:48 p.m.)

Letting negotiations drag could be a convenient negotiating ploy by May’s team, according to an EU official. As the March exit date approaches without a deal, it gets easier for May to garner support from a “coalition of reasonables” from across the aisle in support of a politically difficult compromise.

Business Fears (1:45 p.m.)

Back in the U.K., companies are worried about the Brexit impasse and uncertainty about the future relationship between Britain and the EU. Carolyn Fairbairn, director-general of the CBI, the country’s biggest business lobby, said that “threadbare” business patience “is nearing an end.”

“The risk of no deal is already biting hard,” she said. “Firms are accelerating their contingency planning, diverting investment and costing jobs. And many firms, especially smaller businesses, simply have no time to prepare. All efforts should focus on securing transition to relieve pressure on firms, protecting people, wages and living standards across Europe.”

Extending the transition period “should be welcomed” if it helps to unlock the talks, she said.

EU Leaders Seeking to Avoid Salzburg Drama (1:37 p.m.)

If there was one thing that EU leaders wanted to avoid this week, it was a repeat of the Brexit drama of the Salzburg Summit, which had threatened to throw negotiations with the U.K. into disarray.

In an effort to curtail damaging leaks, aides to the bloc’s envoys in Brussels didn’t receive their regular detailed debrief from the exchanges at Wednesday’s dinner, according to three diplomats with knowledge of the matter.

The secrecy about what happened was aimed at controlling the message from the summit and was met with dismay by some diplomats who felt they are being left in the dark, one of the officials said, asking not to be named as the matter is sensitive.

Still, on Wednesday evening national diplomatic delegations relayed the scant information coming from leaders in the room to each other, as they sought to piece together where the long-stalled negotiations stand.

Three officials told Bloomberg that May came across as nervous, prompting German Chancellor Angela Merkel to note afterward that she didn’t really understand what the British prime minister had said and would ask the EU’s chief Brexit negotiator Michel Barnier to clarify what exactly her message was.

A fourth official corroborated that May was speaking too fast to be intelligible to her counterparts. A German government spokesman declined to comment on the account.

The officials described an atmosphere of bafflement about May’s insistence of repeating positions which she had laid out in the past, and which failed to make inroads with her peers. They also said that leaders were disappointed that the premier didn’t bring anything new to the table, even though national delegations had been briefed before the summit that this would be the case.

That’s at least part of the reason another summit hasn’t been called for November -- EU leaders don’t want to come back unless there’s something new to hear.

Beer and Frites (1:25 p.m.)

After the summit dinner Wednesday, French President Emmanuel Macron and German Chancellor Angela Merkel took advantage of the mild October evening to take a stroll from the Council building into the center of Brussels to the picturesque Grande Place -- a half-hour’s walk at a good pace without security details. They were joined by the prime ministers of Belgium and Luxembourg, Charles Michel and Xavier Bettel, at Le Roy d’Espagne -- a Belgian brasserie famous among tourists for its beer and frites. Merkel had a glass of red wine (as did Michel, it appears). The Luxembourg leader footed the bill.

“We had drinks with some colleagues last night, with beer and frites because we’re in Brussels,” Bettel told reporters. “It was very agreeable. We are humans, and human relations are very important,” he said, adding that the leaders discussed the earlier meetings.

Once a Deal Is Done (1:05 p.m.)

Lawmakers who want to thwart Brexit or improve the terms of the exit are trying to figure out how to go about it when May finally brings a deal back to Parliament. Much of the debate centers on whether the motion that presents the deal is amendable or not. Campaigners for a second referendum want to amend the motion to call for another plebiscite, for example.

Cabinet minister Andrea Leadsom, who oversees timetabling of House of Commons legislation, confirmed on Thursday that it would be amendable. But she coupled that with a warning -- “Anything other than a clear vote for the deal will bring huge disruption to businesses and the economy.”

Brexit Secretary Dominic Raab indicated this week the vote would be a binary choice between May’s agreement and no deal: Raab Letter Sparks U.K. Tory Anger Over ‘Meaningful’ Brexit Vote

Coming up:

• May is expected to give a press conference at 4:15 p.m. in Brussels
• EU leaders discuss migration and security, then economic and monetary union
• EU President Donald Tusk press conference expected at 3:30 p.m. in Brussels

Earlier:

May Says U.K. Could Extend Brexit Transition to Ease Deadlock
Any U.K. Free Trade Deal With U.S. Would Fail to Offset Brexit
Brexit Bulletin: How Much Longer?
Raab Letter Sparks U.K. Tory Anger Over ‘Meaningful’ Brexit Vote

--With assistance from Emma Ross-Thomas, Viktoria Dendrinou, Suzi Ring, Nikos Chrysoloras, Alex Morales, Kitty Donaldson, Katharina Rosskopf and Patrick Donahue.

To contact the reporters on this story: Tim Ross in Brussels at tross54@bloomberg.net;Dara Doyle in Dublin at ddoyle1@bloomberg.net;Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Stuart Biggs, Emma Ross-Thomas

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