Brexit standoff continues before EU summit

British prime minister Theresa May on Monday evening told MPs in London that the EU should not allow disagreements over the Irish border issue hinder the withdrawal agreement.

The key issue of how to prevent the return of a hard border between Northern Ireland and EU-member Ireland has become the biggest hurdle to the Brexit withdrawal deal, and the lack of progress on the issue since March has increased the risk of a no-deal scenario before Brexit day next March.

The EU has proposed a so-called backstop solution that would keep Northern Ireland in the EU's customs union and single market for goods, a solution May has rejected, whose minority government is supported by the Northern Irish Democratic Unionist Party (DUP).

One way to overcome most of the checks between Northern Ireland and the rest of the UK – proposed by the UK – is to keep the entire UK in the customs union after the transition period ends in 2020. Some regulatory checks would still be necessary, for example on animal health.

In her most detailed speech yet on the Irish border issue, May said the EU had stuck to its proposal of keeping Northern Ireland in the EU customs union if a UK-wide plan is not ready to be put in place after a transitional arrangement runs out at the end of 2020.

EU diplomats have said the UK-wide plan raises several difficult issues, such as how would the EU lead trade negotiations, and what would be the status of the UK, which would have a customs arrangement with the EU, but would be out of the bloc.

The EU also rules out agreeing to any permanent arrangement as it would need to be sorted out in the next round of negotiations on the future relationship with the UK only to be started once the UK is out of the EU next March.

May insisted that original, Northern Irish-only backstop solution needs to be time-limited, something the EU has not agreed to.

As one EU diplomat put it: "it has to be made sure that there is never a hard border on the island of Ireland, and I don't see us agreeing to something that lapses after three years."

Ireland's deputy prime minister and foreign minister Simon Coveney also insisted on Monday that a backstop can't be time-limited - and pointed out that the UK has already agreed to that last December and again in March with the EU.

"Nobody was suggesting in March that a backstop would be time-limited in terms of picking a date in the future as an endpoint for the backstop. The backstop will, unfortunately, be there until and unless something else is agreed," he said.

"I still think it is possible to do that [a deal], but clearly it is going to take a bit more time than people had hoped," he said, adding that Dublin is frustrated and disappointed that negotiators have stopped discussing until the summit later this week.

'We are in limbo'

The EU side has been uncharacteristically muted in its assessment of how the negotiations have unraveled during the weekend.

"Several key issues remain unresolved," an EU commission spokesman said Monday.

A meeting of advisors to EU leaders was cancelled on Monday as there was no deal in sight. Barnier will not hold a press conference after his meeting with ministers on Tuesday.

"We are in a limbo," one EU diplomat told EUobserver.

May is expected to brief EU leaders on Wednesday evening, and Barnier will also update them separately on the negotiations. EU leaders on Wednesday could also discuss the possibility of calling for another EU summit dedicated to Brexit in November, if a deal is near.

Some EU diplomats also think May needs more time to get the UK government and MPs to agree to the deal taking shape in Brussels. The thinking in Brussels is that she also needs to show politically that she did not agree to the EU's demand, but fought back.

The DUP has threatened to vote down the budget plan if the party's red lines – no separation of any kind between Northern Ireland and the rest of the UK – are breached. The budget vote takes place on 29 October.

Another EU diplomat said that the bloc expects the UK to engage positively and find a solution that benefits all.

Top officials at the European Commission also discussed on Monday the EU's contingency plans in case of a no-deal scenario. This is also expected to be discussed by EU affairs ministers on Tuesday in Luxembourg.

Some member states are keen for the EU commission to publish its plans but for different reasons. France, for instance, wants to make sure that the UK understands and feels the pain of Brexit, while others more exposed to the Brexit fallout, such as Denmark or Belgium want to update their own parliaments on preparations.

French president Emmanuel Macron hit a conciliatory tone on Monday, saying at a press conference that progress is possible in the next days.

Macron said he will have a phone call with May on Monday and with EU negotiator Michel Barnier on Tuesday.

In his invitation letter to EU leaders, EU council president Donald Tusk warned that the bloc must prepare for a no-deal scenario, "which is more likely than ever before". But added that it does not mean the EU should work for a deal in parallel.

"As someone rightly said: 'It always seems impossible until it's done.' Let us not give up," Tusk wrote in his letter.