Michel Barnier, the EU’s chief Brexit negotiator, has told member states that the British government has just 48 hours to agree a text on a potential deal or it will be told that negotiations will not move on to the next stage.
Barnier informed EU ambassadors that Downing Street had told him a potential solution was being worked out that could possibly satisfy both Northern Ireland’s Democratic Unionist party and the Republic of Ireland, but that it had yet to be signed off by any of those involved.
Another meeting of diplomats of the 27 member states has been pencilled in for Friday evening, should the UK find an agreement with the DUP on a solution to avoiding a hard border on the island of Ireland.
There were signs that progress was being made towards a deal to avoid a hard border on the island of Ireland. At a press conference the Irish prime minister Leo Varadkar said Theresa May told him she would come back with fresh proposals late on Wednesday or Thursday.
If the UK fails to agree a joint position with the European commission by Friday, the member states informed Barnier that they would not have time to take it back to their capitals for scrutiny ahead of next week’s critical European council meeting.
In that scenario, the leaders would once again rule that insufficient progress had been made on the opening issues of citizens’ rights, the financial settlement and the Irish border for talks on trade and a transition period to start.
A failure to move talks on in December would mean that the terms of a transition period could potentially only be discussed after the next European council summit of leaders in March, by which time key businesses in the UK will have had to make decisions over their location and investments in the country.
It is possible that the leaders would call an emergency summit in January or February to agree to move talks on and discuss the terms of a transition period. But the longer it takes the British government to offer certainty over trading terms after March 2019, firms will make decisions that will cost the British economy.
Varadkar said there was “room to manoeuvre” the deal into the right position before the European council summit next week.