May open to longer Brexit transition as EU summit hunts for breakthrough

18 October 2018 10:37am

17 October 2018. By Michael Acton, Zosia Wanat and Matthew Holehouse*.

UK Prime Minister Theresa May told EU leaders on Wednesday night she is willing to consider a longer post-Brexit transition period as an attempt to fix the Irish backstop question.

May told other national leaders at the European Council in Brussels that she’s determined to successfully negotiate an exit from the EU and said “creative” legal solutions are needed to break the impasse.

But she offered no substantive change in course, and EU officials say that ideas to solve the issue have been exhausted — leaving the risk of a no-deal exit growing.

Still, EU officials welcomed May’s constructive approach following a confrontational summit last month in Salzburg.

EU leaders have left open for now the idea of calling a further meeting in November with the UK, according to an EU official. They have previously said they'll do so if chief negotiator Michel Barnier tells them a breakthrough has been reached.

Alternatively, they could convene a meeting without the UK to discuss their no-deal preparations, MLex has learned. But such a meeting risks sending a signal that talks are beyond saving.

The negotiations have reached deadlock over the question of a backstop solution to the Irish border — a last-resort guarantee that there will be no hard border between Ireland and Northern Ireland, which will come into effect if no better solution is agreed during a planned transition period.

The EU has proposed keeping Northern Ireland in the bloc’s customs union, but that would effectively shift the problem elsewhere, necessitating a customs border between Northern Ireland and the rest of the UK — something that May has ruled out.

May told her counterparts that she is “fully committed to finding a legally operative backstop,” a UK official said, and wants to “find a creative way out of this dilemma.” Besides that, she said, much of the exit treaty was ready and there was broad convergence on a framework for a “genuinely ambitious and broad future partnership”.

“We have shown we have done difficult deals together and I remain confident of a good outcome,” May said, according to the official. “The last stage will take courage, trust and leadership on both sides.”

Style and substance

Nevertheless, she didn’t offer any concrete ideas to solve the Irish border issue, according to EU Parliament President Antonio Tajani, who was in the room.

Yesterday, council President Donald Tusk said other EU countries need “new facts” as well as “goodwill” to make progress on the border issue, calling on May to bring “concrete proposals” to break the impasse.

On Sunday talks broke up without agreement. Negotiators had sought to find a legally-binding way to link the EU’s proposal of keeping Northern Ireland within the EU’s customs union with the UK’s proposal for a customs union involving the whole country — a settlement that the EU thinks could take years to negotiate.

Among the proposals raised during the talks was a longer transition period, lasting from 2019 to December 2021, during which the UK would be covered by the existing terms of membership. This would give negotiators time to find a better border solution, preventing the Northern Ireland-only backstop from needing to come into force.

The current plan is for a transition to December 2020, to coincide with the end of the EU budget cycle. But both sides have known for some time that this will be too short to fix the terms of the UK’s future relationship with the bloc.

Tajani said he was open to a transition period of up to three years to break the deadlock. “This eventuality would be regarded in a positive way by the European Parliament,” he said.

Leaders

Leaders arriving at the summit tried to talk up the prospect of a deal being struck.

Ahead of a one-on-one meeting with Theresa May, French President Emmanuel Macron said the EU was not “closing doors to compromises” and that the fraught issue of the Irish border was being addressed “in a technical, pragmatic manner, with a lot of flexibility and intelligence.”

“I don’t think from my perspective that it’s a deal-breaking element, but it implies also a few clarifications from the British,” he said.

Dutch Prime Minister Mark Rutte said that “a lot of progress has been made,” and that he was “cautiously optimistic that over the upcoming weeks Michel Barnier and the negotiating team in the UK will come to final conclusions.”

Irish prime minister Leo Varadkar said he was open to a longer transition if it helped the UK accept the border backstop. “I’ve always been of the view that it could easily take two years or more to negotiate a new EU-UK treaty, covering everything from the economy to trade to security, [which] would need to be ratified by 28 parliaments,” he said.

“If it did help to reassure people [the backstop] would never be activated, that would be a positive thing.”

Leaders avoided speculation over the likelihood of a no-deal outcome, though some acknowledged that they were making the necessary preparations.

“A longer transition is certainly one possibility,” said Belgian Prime Minister Charles Michel. “We are also working with European colleagues on the possibility of a no-deal. It’s not our preference, but it’s also one of the possibilities.”

Earlier in the day, UK Environment Secretary Michael Gove said that an agreement might not be reached until a meeting of leaders in December.

“The prime minister will say at a given point if we believe we cannot get a deal that the government is moving to preparing for no deal and that no deal is the government’s lead option,” he said.

* Additional reporting by Lewis Crofts and Sam Wilkin

Brexit Special Report