World U.K. Faces Brexit Deadline on Ireland as Varadkar Clings On

16:50  27 november  2017
16:50  27 november  2017 Source:   Bloomberg

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Prime Minister Theresa May has a week to find a compromise on the conflicting Brexit demands from the north and south of Ireland , and a political scandal threatening the Irish government could further

Varadkar has also stepped up the rhetoric in recent weeks, and raised the prospect on Friday that the deadlock in talks will continue into 2018. He’s fighting for his own political survival, with the risk of an imminent election, and Ireland ’s Brexit stance is a sensitive matter for voters. Tusk’s Deadline .

(Bloomberg) -- Prime Minister Theresa May has a week to find a compromise on the conflicting Brexit demands from the north and south of Ireland, just as a political scandal threatening the Irish government could further undermine her chances of success.

Irish Prime Minister Leo Varadkar wants written assurances that Brexit won’t mean a return to checkpoints and towers along what will become the EU’s new land frontier with the U.K. Northern Ireland’s Democratic Unionist Party, which props up May’s government, values its ties to mainland Britain more than an open border with the Irish Republic. It rejects the European Union’s proposed solution and says the future of the border can only be settled in tandem with a final trade deal.

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Leo Varadkar wearing a suit and tie: Irish Prime Minister Leo Varadkar Interview © Bloomberg Irish Prime Minister Leo Varadkar Interview

Leo Varadkar

That’s been the U.K. government’s stance all along, and it had all but parked the Irish issue in its negotiating plans, focusing instead on the financial settlement as the main obstacle. Just as progress was being made on the divorce bill, though, the European Commission made clear that it also needs a workable solution for the Irish border by Dec. 4 or else talks on a future trade deal will be off.

Varadkar has also stepped up the rhetoric in recent weeks, and raised the prospect on Friday that the deadlock in talks will continue into 2018. He’s fighting for his own political survival, as his team step up efforts to avoid an election that could harden positions on Brexit.

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The government is set for a fourth day of talks over a whistle blower controversy, with Irish Foreign Minister Simon Coveney telling broadcaster RTE that some opposition demands to deal with the affair are “reasonable.”

Stephen Donnelly, a spokesman for opposition party Fianna Fail, responded by saying he hoped a compromise could be found to avoid an election just as Brexit talk hurtle toward a crunch point next month.

Tusk’s Deadline

Pressure is mounting on May -- including from within her own party -- after she failed to convince European leaders in October to move talks on from the divorce to trade. Another summit is scheduled for Dec. 14 but the EU wants commitments in place well before so it can agree on its common position. There may be another round of negotiations this week.

Read more: How the Irish border affects Brexit talks

The opposition Labour Party’s Brexit spokesman, Keir Starmer, raised the stakes on Sunday, saying May has “two weeks to save herself.” He hinted at the possibility of a vote of no-confidence if May fails to seal the progress she seeks in Brexit talks next month, telling the Sunday Times that “if there isn’t sufficient progress this time, I think that scrutiny will become really intense and it will be about her authority.”

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May has only a slim majority in Parliament, thanks to the DUP, and some of her own lawmakers reject her Brexit policy.

Blind Faith

The EU has adopted Ireland’s position on the border issue almost wholesale. Ireland’s EU Commissioner, Phil Hogan, weighed into the debate on Sunday, telling the Observer newspaper that the issue could be resolved if Britain agreed for the whole country -- or just Northern Ireland -- to stay in the single market or customs union. May has said she’ll pull the U.K. out of both, and Northern Ireland’s DUP doesn’t want to be treated differently to mainland Britain.

“If the U.K. or Northern Ireland remained in the EU customs union, or better still the single market, there would be no border issue,” he told the paper. “That’s a very simple fact. I continue to be amazed at the blind faith that some in London place in theoretical future free trade agreements.”

A spokesman for May’s government said on Monday efforts to find a way forward continued. But the government continues to believe that a final solution won’t be reached until the future trading relationship is clear, spokesman James Slack said.

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Ireland’s Coveney agreed that some of the finer details won’t be hashed out until the last phase of Brexit talks, but maintained the government’s demand that it needs written reassurances from the U.K. that a border will somehow be avoided.

Different Visions

The trouble is that the EU has a less ambitious vision for the kind of trade deal the two sides will eventually strike than the U.K. does. While the U.K. seeks to keep current rules as much as possible, Europe is talking about an accord like the one Canada struck with the EU, which maintains trade barriers on products such as beef and dairy. The worse the trade deal, the more enforcement will be needed on the frontier.

Read more: What the EU is Seeking in a Trade Deal with the U.K.

The Irish government is adamant it will continue to demand the best deal possible, even if finds itself in the middle of an election campaign. Varadkar spent the weekend in contact with the leader of the opposition, Micheal Martin, trying to avert an election over his deputy’s handling of a whistle blower controversy.

Varadkar repeated that Deputy Prime Minister Frances Fitzgerald shouldn’t resign, as opposition political forces have demanded. Fitzgerald faces a no-confidence vote on Tuesday which could pull down 38-year-old Varadkar’s minority government. In that case, an election would be held next month, Varadkar said.

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The Republic of Ireland will remain an EU member state. Varadkar ’s short tenure as Irish leader so far has seen a marked hardening in Dublin’s attitude to Britain’s Brexit issues, with It is my fervent hope that progress will have been made, but I do not underestimate the challenges we face ,” Varadkar said.

DUP View

An election is unlikely to change Ireland’s core demand for written guarantees from May on the border. The U.K. leader has already prepared a higher offer for Britain’s exit payment, and the two sides have made progress on the rights of EU citizens.

Britain is consulting the DUP on the border question, and the difficulty in finding an acceptable formula was underlined by that organization’s conference on Saturday. Party leader Arlene Foster was clear she would oppose the most straightforward means of avoiding a hard border -- by applying EU rules to Northern Ireland after Brexit and reiterating her opposition to trade barriers within the U.K.

“The Republic of Ireland needs to focus on its own identity and not stick its nose into Brexit and the issues that affect us,” Ian Paisley junior, one of the party’s lawmakers in London, said in an interview. “A potential election in the Republic of Ireland might take their minds of the needs of Northern Ireland for the present time and that’s not a bad thing.”

(Adds Irish foreign minister’s comments in fifth, opposition comments in sixth.)

--With assistance from Rodney Edwards

To contact the reporters on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net, Alex Morales in London at amorales2@bloomberg.net.

To contact the editors responsible for this story: Vidya Root at vroot@bloomberg.net, Emma Ross-Thomas, Ros Krasny

©2017 Bloomberg L.P.

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British Prime Minister Theresa May's underlying problem is this: Where should the border between a post-Brexit U.K. and the E.U. lie? The British government wants different rules than the E.U. on the free movement of goods and people, and that would require some form of checkpoint.Between the U.K. and the European continent, the answer is easy: The English Channel provides a distinct, watery boundary separating Britain from France, the Netherlands and Belgium, and beyond them Germany, Spain and Italy.Related: Professionals wave goodbye to U.K.

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