Johnson Stumbles in Bid for Brexit Deal as EU Demands Answers

LONDON (Capital Markets in Africa) – Boris Johnson’s attempt to secure a Brexit deal ran into trouble after the European Union warned the talks were still a long way from a breakthrough and the British prime minister’s political allies distanced themselves from his plans. The pound fell.

After a weekend of intensive negotiations in Brussels, the EU’s chief Brexit negotiator, Michel Barnier, told a meeting of envoys on Sunday that the U.K.’s proposals for breaking the deadlock over the Irish border lacked detail and risked leaving the single market vulnerable to fraud, officials said. The unionist party that backs Johnson’s minority Conservative government in London also raised concerns.

Talks are continuing to resolve the impasse over customs checks, but the U.K. isn’t sure the EU will change its position, a government official said on Monday.

Negotiators are now in a race against time to sketch out an accord for EU leaders to endorse at a summit that starts on Thursday. Johnson wants an agreement at that gathering so that members of the U.K. Parliament can vote to approve or reject it in a special session on Saturday. That way, he may just be able to avoid being forced to delay Britain’s departure beyond the Oct. 31 deadline, which he has vowed to meet.

The next 48 hours will be crucial, with the bloc wanting to know by Wednesday how the negotiations are to proceed. If Barnier’s talks founder, EU leaders will have to decide whether to abandon them and move on to the question of whether to allow Britain to delay its departure. Or, if there’s still a chance of a breakthrough, they may hold another emergency summit shortly before Brexit day, according to officials in Brussels.

Any agreement will still have to be ratified by the U.K. Parliament, which was re-opened by Queen Elizabeth II at a ceremony on Monday. There, the government repeated its pledge to deliver Brexit by the month’s end. But Johnson lacks a majority at Westminster and will now be vulnerable to attempts to oust him or reject any accord he reaches with the EU. Labour Leader Jeremy Corbyn warned on Sunday that he was unlikely to support any deal agreed by the prime minister.

Early on Monday, Chancellor of the Exchequer Sajid Javid announced a post-Brexit budget for Nov. 6 less than a week after the U.K. is expected to leave the bloc. That budget could be a pre-election spending spree or the way the government is going to deal with a no-deal Brexit. Scottish National Party leader Nicola Sturgeon told BBC radio the government “is making it up as they go along” with no guarantee the nation will have left the bloc by Oct. 31.

The obstacle the negotiators are grappling with is the thorny question of how to ensure there is no need for checkpoints to inspect goods crossing the border between the Republic of Ireland and the U.K. region of Northern Ireland after Brexit.

Last week, Johnson put forward plans to take Northern Ireland out of Europe’s customs union and give Stormont, its power-sharing assembly, a veto over the arrangement. EU officials say both of these are hugely problematic.

Johnson’s Offer
The U.K. has softened its position on the veto and has proposed a complex customs solution that would see Northern Ireland leave the EU’s customs union but still adhere to its rules. The U.K. wants to be able to track goods entering Northern Ireland but treat them differently depending on where they are due to end up, two officials said.

That may incur the wrath of Northern Ireland’s Democratic Unionist Party — which is in a formal agreement to support Johnson’s government and influences how a significant number his euro-skeptic Conservative MPs vote. DUP Deputy Leader Nigel Dodds told Italy’s La Repubblica on Saturday that the party would reject any solution that would weaken Northern Ireland’s custom ties to the U.K.

In Brussels on Sunday, Barnier updated envoys from EU governments on the progress in the talks, which re-started in earnest on Friday. He said the latest version of Johnson’s customs proposal was untested, risked undermining the EU’s single market by leaving it vulnerable to fraud, and was unlikely to be nailed down in the next few days, according to officials.

If talks break down, Johnson is required under a new law to delay Brexit, something that he has vowed to avoid. European Commission President Jean-Claude Juncker indicated on Sunday that he would approve another delay, if the British side asked for it.

Source: Bloomberg Business News