- A discussion between the British and Irish prime ministers Thursday afternoon ended with both sides acknowledging that a settlement over Britain's departure from Europe could still be achievable before the current Oct. 31 deadline.
- The British government has not yet confirmed whether it conceded on some of the outstanding sticking points
The U.K. government's minister responsible for Brexit is meeting the European Union's chief negotiator in Brussels to continue last gasp talks this morning.
A discussion between the British and Irish prime ministers Thursday afternoon ended with both sides acknowledging that a settlement over Britain's departure from Europe could still be achievable before the current Oct. 31 deadline.
In a joint statement after their meeting, Leo Varadkar and Boris Johnson said they "agreed that they could see a pathway to a possible deal," just days ahead of a crunch EU Council summit when Johnson will seek to win over his skeptical European counterparts for a Brexit agreement that he will then try to pass through the British parliament.
Varadkar appeared upbeat after his two-hour conversation with Johnson, and said he was "now absolutely convinced" the British leader does want a deal. But he nevertheless suggested that Johnson's preferred timeline might prove to be ambitious, insisting that an agreement might be possible "in the coming weeks," rather than days.
The Irish government says it wants to be positive but realistic about a timeline, and has been at pains to point out that Brexit has brought with it many unexpected surprises in the past. One pithy official in Dublin told CNBC there have been "black swans all over the place, flocks of them."
Meanwhile, the British government has not yet confirmed whether it conceded on some of the outstanding sticking points, with U.K. ministers saying publicly that during such a "live negotiation," it would be unhelpful to provide a detailed breakdown of Thursday's discussion.
But the French Secretary of State for European Affairs Amelie de Montchalin told French radio Friday morning that "if there is no desire, particularly from the British side, for compromise, then a no deal is possible."
The pound also weakened briefly Friday morning after the EU Council President, Donald Tusk, who will chair talks between the 28 EU heads of state next week, said on Twitter that the U.K. has still "not come forward with a workable, realistic proposal." He confirmed that he had received "promising signals" from Varadkar though, and reiterated that "even the slightest chance must be used."
Any route to a deal will need to thread a narrow path through the thorny political ground of the border separating the Republic of Ireland from the U.K. nation of Northern Ireland.
The EU and Johnson's government have until now remained at variance over the avoidance of customs checks at that border, and the self-determination rights of Northern Ireland's residents and their political representatives.
And in Westminster, where the House of Commons will need to approve any Johnson-crafted deal almost immediately after next week's EU Council summit, legislators from across the political spectrum hold highly entrenched views on the future of Northern Ireland post-Brexit.
Analysts and lawmakers offered a mix set of reactions to Thursday's prime ministerial meeting, and outlined the potential implications for some of the other parties that have a stake in these increasingly frantic negotiations.
The office of Irish Finance Minister Paschal Donohoe said the meeting "appears to have gone well," it had been "positive sounding about the potential for a way forward," and that "all sides seem willing to keep engaging in advance of the Council."
But an official at the finance ministry acknowledged there was still a "lot of work to do around customs and consent," the latter a reference to the role that the local government executive in Northern Ireland will have in shaping the EU-U.K. relationship in the future.
Johnson's proposals published last week suggested that Northern Ireland would remain inside the EU's customs union for several years, but that the assembly in Northern Ireland — often known by the name of the building that houses it, Stormont — would have the final decision on whether it remains in that customs union over the long term. The EU has yet to fully embrace that concept, but has not outright rejected it either.
"The fact they have met and are trying to be cautious and polite about each other is a positive sign," says Katy Harward, a political sociologist and senior fellow at the think tank U.K. in a Changing Europe.
"Varadkar could hardly say that there's no hope of a deal this month, it's not his place to say so."
The latest British proposals are designed to obviate the need for an insurance policy that Johnson's predecessor Theresa May had negotiated, known as the Irish backstop, that would have kept all of the U.K. inside Europe's customs union if a future trade agreement could not be finalized by late 2020.
To avoid customs checks and maintain freedom of movement for goods across the Irish border, the new British stance relies heavily on technological solutions that the European Commission has thus far concluded are untested elsewhere and therefore not operable. But experts say that position may be shifting.
"To find a deal is a matter of semantics, legal high tech, which the EU Commission is good at," says Karel Lanoo, the CEO of Brussels-based think-tank the Centre for European Policy Studies.
"All other alternatives at this stage are very risky," he says of Johnson's insistence that the U.K. must exit the EU on Oct. 31, with or without an agreement with Brussels.
But Lanoo posits that Johnson's face-to-face engagement with Varadkar should be interpreted positively. "If there is a will they can find a deal. The fact that they met is already very important."
Pieter Kleppe, who runs the Brussels office of the non-partisan policy outfit Open Europe, with a focus on a post-Brexit EU, says he agrees with Varadkar's assessment that a settlement may eventually be possible "not next week but maybe after."
That will leave very little time for the Parliament in Westminster to pass legislation that approves and then enacts any new agreement, and this may in turn make it difficult for a brief extension to the Oct. 31 deadline to be avoided.
And the passage of that legislation will rely on a parliamentary majority in favor of a deal, which has been largely lacking over the past 10 months.
One member of Johnson's Conservative Party who sits in the Parliament's upper chamber, the House of Lords, told CNBC the meeting Friday morning between U.K. Brexit Secretary Stephen Barclay and the European Commission's chief Brexit negotiator Michel Barnier would be key. Robert Hayward said that the public statements after that discussion would allow lawmakers to see "whether the logjam has begun to break."