LUXEMBOURG • The European Union struck a more optimistic tone about the prospects of a Brexit deal yesterday after Britain sent revised proposals in a bid to meet a midnight deadline.
As the hours tick down, officials from the two sides worked late into Monday night in Brussels and resumed early yesterday morning, racing to wrap up an agreement for leaders to rubber-stamp at a summit this week.
If a deal is reached, British Prime Minister Boris Johnson would be able to put it to the British Parliament on Saturday and so avoid having to seek another delay beyond Oct 31. But he lacks a majority in Westminster. Any concessions could prompt the Democratic Unionist Party, which props up his administration, to try to scupper the agreement.
"Even if an agreement will be difficult - more and more difficult to be frank - it will still be possible this week," EU's chief Brexit negotiator Michel Barnier told reporters in Luxembourg yesterday morning before a meeting with ministers from EU governments.
Mr Barnier told the EU that he saw three possible scenarios ahead: A deal with Britain, another delay to Britain's departure, or a "breakdown"of talks, according to diplomats in the bloc.
The pound rose towards a three-month high versus the US dollar, gaining 0.5 per cent to US$1.2663 as progress in the talks fuelled optimism in the market.
Britain's proposals are shrouded in secrecy, but the focus is on Northern Ireland's relationship to the EU's Customs union and the degree to which checks can be eliminated on goods crossing the Irish border, a scene of violence for decades until the late 1990s.
Britain is trying to prove that there is no risk of substandard goods entering the EU's single market, an EU official said. The EU has also made concessions, a British official said.
Mr Barnier said there must be conclusion by the end of yesterday to give the EU's 27 remaining governments time to assess any agreement before the summit that starts in Brussels tomorrow afternoon. Mr Johnson had also wanted a deal by yesterday night, the British official said.
While EU diplomats said Mr Barnier sounded cautiously optimistic in their behind-closed-doors meeting in Luxembourg yesterday morning, they also emphasised that there is clearly still a lot of work to do.
If things go well, it is possible negotiators could have a draft legal text today. If they do not, talks could still continue, pushing leaders to hold an emergency summit before the end of the month.
Mr Barnier also told EU ministers that Customs arrangements for the island of Ireland, the issue of giving more say to the Northern Irish authorities as well as the so-called level-playing field clauses were all still open in the talks.
After weeks of deadlock, hopes of a deal were revived last week after Mr Johnson held talks with his Irish counterpart Leo Varadkar, who is crucial to any agreement. For the British Premier, an agreement this week would allow him to honour his pledge to deliver Brexit on Oct 31, boosting his standing ahead of a likely election.
"Today is a key day," Irish Foreign Minister Simon Coveney told reporters in Luxembourg yesterday. "I don't want to raise expectations, but later on today or this evening", if there is going to be a deal for this week's summit, "a big step forward needs to happen today", he said.
An official from the French government said Britain had presented a "serious proposal".
A spokesman for Mr Johnson said he had a "constructive" 20-minute phone call with French President Emmanuel Macron yesterday.
BLOOMBERG, REUTERS
