Tusk Says Breaking ‘Impasse’ Needs U.K. Proposals: Brexit Update

(Bloomberg) -- Prime Minister Theresa May briefed her Cabinet on Brexit, calling for unity to deliver a good deal. Meanwhile European ministers have gathered in Luxembourg, and the question now is whether leaders meeting Wednesday for dinner can find a way through the deadlock.

Holding the line (4:15 p.m.)

May’s spokesman didn’t add much to our current knowledge on the state of talks. He said the prime minister set out her position on Monday in Parliament and was looking forward to a face to face with Tusk in Brussels on Wednesday. The U.K. wants to make progress as quickly as possible, James Slack said.

More From Tusk (3:10 p.m.)

“The problem is clear,” Tusk told reporters. “It’s still the Irish question, the problem of the border between Ireland and Northern Ireland and the so-called backstop.” He described it as a “new version of the Gordian knot,” adding that he couldn’t see a new version of Alexander the Great around to solve it.

“I hope that tomorrow Prime Minister May will present something creative enough to solve this impasse,” he said.

Summit Unlikely to Deliver Much: Coveney (2:50 p.m.)

The EU’s chief Brexit negotiator, Michel Barnier, has just started briefing the 27 governments at a meeting in Luxembourg on the state of the talks and the prospects for Wednesday’s summit.

It’s “unlikely there will be a lot agreed tomorrow night,” Irish Foreign Minister Simon Coveney said as he entered. He also played down the likelihood that a follow-up summit in November would be announced by leaders.

“There’s going to be a need for a signal from the negotiating teams that a new summit is necessary before it will be called,” he said.

And Coveney reiterated the EU’s opposition to making the all-important backstop for the Irish border temporary: “If you set a date in the future when a backstop falls, then it’s not a backstop at all.”

Varadkar: Still ‘Quite a Gap’ on Backstop (2:45 p.m.)

In Dublin, Irish Prime Minister Leo Varadkar told parliament “quite a gap” remains between the two sides on the Irish backstop, with lots of work to be done before an accord is reached. He underlined that there’ll be no withdrawal agreement without a “legally operable and legally binding backstop.”

While this has always been his stance, he was at pains to reassure lawmakers that it remained the case, after Irish Labour Party leader Brendan Howlin unexpectedly told journalists that he understood from sources that the backstop may be pushed much further down the track.

Tusk: Only New U.K. Proposals Can Break Impasse (2:35 p.m.)

A more pessimistic line from EU President Donald Tusk. Only new proposals from May’s government can break the deadlock, he told reporters, and recent developments “give me no grounds for optimism” going into the summit.

“For a breakthrough to take place, besides goodwill we need new facts. Tomorrow I’m going to ask Prime Minister May whether she has concrete proposals on how to break the impasse. Only such proposals can determine if a breakthrough is possible.”

In case a Brexit agreement is not reached -- “or in case it is rejected” -- leaders at Wednesday’s meeting “will discuss how to step up our preparations for a no-deal scenario,” Tusk said.

Barnier: More Time Needed for Deal (1:30 p.m.)

“We have worked a lot over the past week and the last few days with the British authorities to find a comprehensive agreement for an orderly withdrawal,” the EU’s chief Brexit negotiator, Michel Barnier, told reporters in Luxembourg.

Barnier said the main sticking point in talks remains how to ensure there’s no hard border in Ireland after Brexit. “We are not there yet,” he said. “We’ll take this time, calmly, and seriously, in order to find this global accord within the next weeks.”

No Cabinet Resignation Threats (1:25 p.m.)

It’s true that no one threatened to resign, according to a person briefed on the Cabinet meeting, but there was a lot of disagreement in the room -- specifically about the time-limited element of the backstop. To say there was unity behind May would be wrong, said the person familiar with the discussions that took place in private.

May Urged Cabinet to Stick Together (1:22 p.m.)

May’s spokesman, James Slack, briefed reporters on the Cabinet meeting. Ministers discussed Brexit for 2 1/2 hours, he said, and “strongly agreed” with the prime minister on the importance of maintaining the integrity of the U.K.

“I’m convinced that if we as a government stick together and stand firm, we can achieve” a good Brexit deal, May said at the meeting, according to Slack. She reiterated that no prime minister could accept having Northern Ireland in a separate customs regime.

“Cabinet also agreed that we must ensure that we cannot be kept in the backstop arrangement indefinitely,” Slack said. No deal is better than a bad Brexit deal which breaks up the U.K., he said.

No minister indicated that they were considering resigning, according to Slack. “They discussed their concerns over the proposals as they stand,” he said.

EU Trying to Do ‘As Little Harm as Possible’ (12:50 p.m.)

“Our commitment is to try to find a solution,” European Commission Vice President Frans Timmermans told reporters in Luxembourg. “We are in the middle of a very, very delicate process, and the only thing that I can assure you is that everyone at the Commission -- Michel Barnier, Jean-Claude Juncker, everyone -- is doing their utmost to do as little harm as possible and to try to find a solution for the issues that have not been solved yet.”

Cabinet Meeting Continues... (12:35 p.m.)

The Cabinet meeting, which was due to last two hours and end at 11:30 a.m., was still going on after 2 1/2 hours, according to a person familiar with the timing.

Earlier November Summit Would Help U.K. (12 p.m.)

As the French official said earlier, the Nov. 17-18 date for a possible Brexit summit next month isn’t set in stone. Officials on both sides suggest it could be held earlier to help May get the parliamentary support she needs. Officials in Brussels increasingly see the U.K. budget, scheduled for Oct. 29, as a milestone and believe a summit could happen at any time after that.

But a word of warning: There’s no certainty about a November summit taking place at all. It all depends on whether EU leaders decide at their meeting on Wednesday there’s been enough progress in the negotiations to warrant one.

Clark: ‘Substantial Upside’ From Deal (11:50 a.m.)

Meanwhile in the House of Commons, Business Secretary Greg Clark is answering questions from lawmakers concerned about the impact of Brexit uncertainty on on British businesses. Clark takes up the line delivered last week by Chancellor of the Exchequer Philip Hammond, that if the U.K. secures the sort of deal it’s seeking, “there is substantial upside to the economy.”

May Briefs Cabinet After Pizza Plot Cools (11:40 a.m.)

May is meeting her Cabinet to discuss the state of play this morning, with her spokesman expected to update the media afterward.

It comes after eight senior ministers -- including Brexit Secretary Dominic Raab and Foreign Secretary Jeremy Hunt -- met over a takeaway pizza on Monday night in the office of Commons Leader Andrea Leadsom to discuss their concerns over May’s negotiating strategy.

According to a person familiar with the discussions, they remain deeply worried about the Irish border backstop -- but they’re not about to quit the government while the negotiations are up in the air. Their view seems to be that there is little alternative to May’s plan except for a no-deal Brexit.

Another EU Meeting Before November? (11:25 a.m.)

More from the French official (10:45 a.m), who told reporters in Paris that Brexit talks must continue immediately after the Wednesday summit, where it is clear a deal is not likely to be reached. The EU27 plan to send a message of “urgency” to the U.K., the official said.

Notably, the official also put forward the possibility of another EU meeting before November to try to avoid last-minute crisis negotiations on Brexit.

German Official: No Sign Talks Will Collapse (11 a.m.)

A German official sounded a note of optimism, telling reporters there’s no indication that talks with the U.K. will collapse and that negotiations remain on track to meet November time frame for a deal -- though he said the EU must prepare for all scenarios.

There has been progress in talks and officials are working on solving final problem, the official said, speaking on condition of anonymity in accordance with briefing rules. The so-called Irish backstop must be legally watertight in the divorce agreement, the official said.

French Official: Irish Border Talks Ongoing (10:45 a.m.)

Negotiations on the Irish border and so-called backstop are ongoing and may not be resolved before Wednesday’s summit, though France is confident progress will be made, a French official told reporters in Paris.

No Food For May (10:10 a.m.)

May will address leaders before their dinner on Wednesday, and then the so-called EU27 will scuttle off on their own to discuss what she’s said, according to a EU official who briefed reporters. They will decide what to do next -- call a summit in November in a sign they believe there’s progress, or step up no-deal planning. Or possibly both.

The EU is not where it wanted to be by now, the official said. And things are trickier than they had expected. The EU is also pushing the line that it’s not in that much of a rush -- the rush is on the U.K. side because of the parliamentary process that has to follow.

Rinkevics: 50-50 Chance of Talks Failing (9:45 a.m.)

Latvian Foreign Minister Edgars Rinkevics told reporters in Luxembourg he still sees a 50-50 chance of Brexit negotiations failing, calling for “more diplomacy, more push for talks.”

“I understand the British government and its difficulties, but I also believe that the EU is united at 27,” he said, referring to the remaining members of the bloc. “There is a need for some good compromise that should be made.”

Coming Up:

  • May is due to address her 27 counterparts Wednesday at the start of dinner. They will then continue to talk Brexit without her. It could go late.

Earlier:

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