EU and UK hoping for brexit deal on eve of European summit

BRUSSELS: British and European negotiators ploughed on with Brexit talks Wednesday hoping that a deal can be found in time for this week's European summit.

Brexit minister Steve Barclay described the closed-door meeting as "intensive" but confirmed Britain would ask for another Brexit extension if there was no deal by Saturday.

And Irish leader Leo Varadkar warned that "many issues remained to be resolved" and suggested that a more realistic target was "an agreement by the end of this month."

Briefing European commissioners, their chief Brexit negotiator Michel Barnier said "ongoing talks have been constructive but there still remains a number of significant issues to resolve."

Earlier, Barnier had said a draft of any deal would have to be ready by early Wednesday if it was to go before European leaders at their summit, which begins on Thursday.

European officials close to the negotiations express cautious optimism but doubts over the idea that a detailed draft can be done in time, despite positive rumours driving the pound higher on currency markets.

British Prime Minister Boris Johnson has promised to take the UK out of the European Union on October 31, with or without a follow-on agreement to maintain orderly economic ties with its former partners.

A British government audit, published Wednesday, added weight to fears of a catastrophic economic breakdown in the event of a "no deal" exit, forecasting a 45- to 65-percent cut in cross-Channel trade for up to a year.

Against this background, Barclay confirmed to British MPs that Johnson would on Saturday comply with a UK law requiring him to send Brussels a letter calling for a Brexit delay if no deal was found.

But he insisted: "We're committed to leaving... on October 31. We think the best way of doing that is with a deal, to leave in a smooth and orderly way.

"That is why the team are, as we speak, involved in intensive negotiations to do that."

Many European officials are pessimistic about the chances of a rapid deal, but none publicly rule it out.

France´s European affairs minister Amelie de Montchalin said: "Of course it is possible, it has been possible for three years."

More intense talks resumed this week after Britain had softened its stance on the customs status of Northern Ireland in order to clinch an accord before the summit.

But a marathon late-night negotiating session in the EU´s Brussels headquarters brought them to the eve of the meeting with still some distance to go to agree the wording of a treaty.

"The teams worked into the night and continue to make progress. The teams will meet again this morning," a UK official said, describing the talks as "constructive".

´Good intentions´

Even if a text is prepared for the leaders this week — or later in the month — any deal would have to be approved by a sceptical British parliament, which holds a special session on Saturday.

By agreeing to a form of customs boundary in the Irish Sea, Britain could allow its province of Northern Ireland to remain under EU rules for exports while legally reverting to the UK customs territory.

But Johnson may struggle to convince hardline Conservative eurosceptic MPs and his allies from Northern Ireland's Democratic Unionist Party (DUP) to accept this.

Nevertheless, Barnier and Barclay judged that a deal was close enough to justify officials working into the early hours of Wednesday.

If the Wednesday deadline is missed, officials said talks could instead resume next week and a special summit be called immediately before the October 31 Brexit date.

European leaders warn they will not let Britain use Northern Ireland as a back door to the single market and Barnier said Tuesday that "it is high time to turn good intentions into legal text".

On Tuesday, German Chancellor Angela Merkel outlined why EU officials are pushing Britain will commit to a "level playing field" in post-Brexit trade and commerce.

"One thing is clear, Britain will develop into another competitor on the doorstep of Europe," she told German industrialists.