November 8, 2018 / 10:29 AM / 13 days ago

PM May dives into diplomacy in bid to clinch Brexit deal

LONDON/BRUSSELS (Reuters) - Prime Minister Theresa May steps up attempts to court European support for a Brexit deal on Thursday as negotiations on securing a smooth British divorce from the world’s biggest trading bloc enter their final stages.

FILE PHOTO: Britain's Prime Minister Theresa May is seen after the ASEM leaders group photo opportunity during a summit in Brussels, Belgium October 19, 2018. REUTERS/Toby Melville

She will meet three other EU leaders in Brussels at a NATO dinner on Thursday and have lunch with French President Emmanuel Macron on Friday.

EU officials and diplomats tried to play down speculation on an imminent deal after an Austrian newspaper report that a deal could be reached “in the coming days” sent the pound higher.

“Parts of the withdrawal agreement still require further negotiation, in particular the issue of avoiding a hard border between Ireland and Northern Ireland,” an EU document said on Thursday before the bloc’s Brexit negotiator Michel Barnier debriefs national ministers on Monday.

Some diplomats said they felt more optimistic than earlier in the week about seeing a deal completed this month. But one senior EU official told Reuters: “A deal is certainly not done. There’s a bit of progress on the backstop but we’ve no idea if it will fly in London. Both sides are still talking, which is good, but we haven’t been told that a deal is imminent.”

Irish Foreign Minister Simon Coveney, whose country insists on a “backstop” clause to avoid disruption on its land border with the British province of Northern Ireland, said “not by a long shot” should an imminent breakthrough be taken for granted.

Even a deal among May and her fractious ministers would not necessarily mean the EU would fall in line, he said.

For their part, British officials also suggested agreement was drawing nearer but not quite imminent. Foreign Secretary Jeremy Hunt said to get a deal within seven days was “probably pushing it” and a government source said May would probably not gather her cabinet until next week.

Nonetheless, with both sides believing a deal must be done in the coming weeks to ensure a smooth withdrawal in March, talks have become intense. May’s interior minister Sajid Javid said: “Clearly we’re in the closing stages ... The next few days, the next couple of weeks, they will be very important.”

Speculation of an imminent deal, after months of deadlock over trade arrangements to keep the Irish border open, mounted as May’s office announced she would meet several European leaders over a NATO dinner in Brussels on Thursday.

Few officials had been aware in advance, though May had been expected in the Belgian town of Mons on Friday morning for an event marking the centenary of the end of World War One.

The dinner, hosted by the U.S.-led military alliance’s Norwegian secretary-general Jens Stoltenberg and including only the Dutch, Belgian and Romanian leaders, is not in itself a forum to talk Brexit.

But being in Brussels could provide a chance to drop in on figures such as Brexit negotiator Michel Barnier, European Commission President Jean-Claude Juncker and EU summit chairman Donald Tusk who most summon EU leaders to endorse any deal.

After the commemoration in Mons on Friday, May is due to meet President Emmanuel Macron in France for further events.

The EU wants to see a breakthrough within a week if leaders are to endorse any deal in November, official and diplomatic sources told Reuters. An EU summit tentatively scheduled for Nov. 17-18 is no longer on the cards.

After May discussed Brexit with German Chancellor Angela Merkel and EU summit chair Tusk this week, British ministers were shown the text of a deal which is 95 percent agreed.

DEAL OR NO DEAL?

The pound has been see-sawing on differing perceptions of whether a deal will be done. May told her cabinet on Tuesday that more time was needed to clear the final hurdle standing between her and a deal: the plan to ensure no hard border emerges on the island of Ireland.

A British government source said a special cabinet sitting of May’s top ministers to discuss Brexit was unlikely before next week.

Some of May’s senior ministers, such as Brexiteer Michael Gove, want to see the verdict of British government lawyers on how a post-Brexit plan for Northern Ireland’s border might work. A Northern Irish political party, the DUP, which props up May’s minority government, wants the advice to be published in full.

May wants a deal on a withdrawal agreement and a framework for future ties before year-end as she must get it approved by parliament. The EU holds a regular summit on Dec. 13-14.

If May fails to clinch a deal or parliament votes it down, then Britain would face leaving without a transition period.

Many business chiefs and investors fear such a “no-deal” Brexit would weaken the West, panic markets and block trade.

A group of British business chiefs called on Thursday for a new referendum on whether to leave the European Union on the terms May hopes to negotiate, or to stay.

Writing by Guy Faulconbridge and Alastair Macdonald; Editing by Peter Graff

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