EU diplomats have warned that substantial gaps remain to be bridged in the Brexit talks as European capitals step up the pressure on chief negotiator Michel Barnier to secure guarantees that Britain will stick to its word.

With less than a month until the end of Britain’s post-Brexit transition period, the two sides are racing to close the remaining gaps on “level playing field” conditions for business, enforcement of whatever is agreed, and fishing rights in UK waters.

Irish foreign minister Simon Coveney told Ireland’s Newstalk radio on Thursday that if the EU side held its nerve and trusted Mr Barnier, “there is a good chance that we can get a deal across the line in the next few days”.

But EU diplomats from worried member states warned that the European side was close to reaching the limits of its negotiating mandate.

“I do not have the impression that we are hours away from a deal,” said one diplomat.

Stefaan De Rynck, a senior member of Mr Barnier’s team, said on Thursday that “significant divergences remain” and that the outcome of talks is uncertain. “My feeling is that both sides are committed to finding a deal,” he said at a European Policy Centre event.

Wednesday’s round of talks between the EU and UK teams ended at 1am on Thursday morning. Negotiators in the subterranean conference centre in Britain’s business department, sustained by takeaway pizzas, were said by UK officials to be grappling with “the same issues” that have dogged the talks up to now.

Some British officials had hoped that a deal could be wrapped up by as soon as Thursday but those hopes receded after the late night talks failed to engineer a breakthrough.

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EU negotiators are still searching for ways to satisfy Paris and other worried capitals that their businesses will be adequately protected from unfair British competition after coming up against staunch UK resistance to their previous demands. 

Mr Barnier briefed ambassadors on Wednesday that the bloc was seeking “definitions, principles and binding, workable and operational enforcement” on state aid, according to one of the participants at the closed-door meeting. 

The issue of governance of a future deal has become all the more sensitive because of the UK government’s repeated threats to violate its divorce treaty with the EU.

In September, the UK government revealed plans to use its “internal market bill” to override the protocol on Northern Ireland agreed last year. It is on course to publish a finance bill that will further challenge the treaty.

UK negotiators believe that French president Emmanuel Macron is the key to unlocking a deal, given the level of interest his country has in the remaining sticking points.

Over recent days, Mr Barnier has been facing demands not to give away too much to the UK from a group of countries including France, the Netherlands, Denmark and Belgium, whose economies are closely intertwined with Britain and whose fishermen rely on its waters.

EU diplomats told the Financial Times that Brussels had so far failed to overcome UK opposition to French-backed proposals intended to guarantee a “level playing field” for business. 

These included plans to require Britain to create a regulator with powers to police state aid to companies even before the money is handed out, and demands for “ratchet clauses” that would force both sides to have environmental and labour regulations that evolved in a similar way over time. 

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France warned Mr Barnier at a meeting of EU diplomats on Wednesday that any future-relationship deal must include “adequate, proportional remedies” and crucially also the right for European companies to haul the UK government before the British courts if it violated its level-playing field commitments. 

Via Financial Times

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