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May's Brexit Breakthrough at Risk as Irish Parties Dig In

U.K., EU Struggle for Irish Compromise Four Days From Deadline

(Bloomberg) -- The breakthrough in Brexit talks that Theresa May has been working to clinch next week was at risk Friday as the Northern Irish party that props up her government threatened to bring her down if she makes anything like the concessions that Europe is demanding.

Both sides dug in over the sensitive question of the Irish border. Irish Foreign Minister Simon Coveney said late Thursday the issue is a “big stumbling block” that means Brexit negotiations are not where they need to be to move on to trade talks. Northern Ireland’s Democratic Unionists, who have more clout than ever because their votes in the U.K. Parliament allow May to govern, made it clear they were in no mood to compromise.

May's Brexit Breakthrough at Risk as Irish Parties Dig In

“If they stop defending the union, we stop voting for them,” DUP lawmaker Sammy Wilson said in an interview. “It’s as simple as that.”

The almost invisible border that was part of the peace process in Ireland was only possible because Ireland and the U.K. were both members of the EU and its single market. The U.K.’s plan to leave means some kind of policed barrier will have to go up as the line between the two becomes the U.K.’s land frontier with the EU. Ireland’s proposal for no control points means Northern Ireland sticking to the EU rulebook – a red line for the DUP whose raison d’etre is to keep the enclave as part of the U.K.

The EU has set May a deadline of Monday to present a solution to avoid a hard border in Ireland, as well as an improved offer on the divorce bill. Otherwise, according to the EU, there won’t be time to orchestrate the breakthrough that both sides seek by year-end that would allow negotiations to move on to the future trading relationship.

Dec. 4 is when May is due to have lunch with European Commission President Jean-Claude Juncker in a meeting that has been tipped as the moment when the path to an agreement will be laid out. Earlier this week, officials on the U.K. side were saying a joint statement on progress could be presented that day, followed by an agreement that leaders would give the green light to trade talks at a summit Dec. 14.

However, if talks go badly this week, there’s a possibility the lunch won’t go ahead, according to a person familiar with negotiations who asked not to be named.

Businesses are clamoring for a December deal and the pound has rallied on hopes there will be one after an outline agreement was reached on Brexit divorce bill, the main other contentious issue. Sterling edged lower in early trading on Friday.

European Council President Donald Tusk visits Dublin on Friday.

Different Deadline

A European official familiar with Irish thinking said the government in Dublin isn’t working to the Dec. 4 deadline and says talks can continue after Monday. The ambassadors of EU members in Brussels are due to start drafting the conclusions for the Dec. 14 summit on Wednesday, which is why the EU side is demanding clarity on the border and the divorce bill before then.

May’s office issued a statement saying it would be “impossible” to reach a detailed solution on the Irish border until Brexit talks move on to discuss trade. The EU rejects that stance: They won’t let trade talks even begin until there’s an agreement on the Irish border.

Still, DUP lawmaker Nigel Dodds offered hope late Thursday of a deal being reached. ‘‘We were talking to people today involved heavily in the negotiations and we believe that it can be sorted, again, with the political will and I believe the political will does exist,” he said. If the party did bring down May’s government, it would risk an election win by Labour’s Jeremy Corbyn, who is loathed by the DUP.

May's Brexit Breakthrough at Risk as Irish Parties Dig In

Underscoring the complexity of the Irish border conundrum, Parliament’s Brexit committee issued a report on Friday saying a solution is impossible given the government’s plan to leave the Europe’s single market. The panel “does not see how it will be possible to reconcile there being no border between Northern Ireland and the Republic of Ireland with the Government’s policy of leaving the Single Market and the Customs Union.”

May's Brexit Breakthrough at Risk as Irish Parties Dig In

The Times of London reported on Thursday that a solution could hinge on giving Northern Ireland more powers locally over customs, energy and agriculture as a way to keep rules the same on each side of the border. The U.K. proposal commits it to working to avoid regulatory divergence on the island of Ireland, the paper said.

May's Brexit Breakthrough at Risk as Irish Parties Dig In

The DUP rejected that option outright, while a European official familiar with Irish thinking said it wouldn’t go far enough for Dublin. May’s office warned that nothing must damage the U.K.’s “constitutional or economic integrity.”

Until negotiations begin on the future customs arrangement between the U.K. and EU, “it is impossible to devise solutions in detail,” the statement from May’s office said. “Our goal is there should be no hard border or physical infrastructure at the border -- we believe that goal can and must be achieved.”

--With assistance from Peter Flanagan Patrick Donahue Ott Ummelas Ian Wishart and Tim Ross

To contact the reporters on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net, Rodney Edwards in London at redwards102@bloomberg.net, Tim Ross in London at tross54@bloomberg.net.

To contact the editors responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net, Flavia Krause-Jackson at fjackson@bloomberg.net, Andrew J. Barden at barden@bloomberg.net, Nikos Chrysoloras

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