Brexit talks put on hold as stalemate deepens

Bloomberg

The UK and the European Union are on course to miss a key milestone on the road to a Brexit deal after talks hit a roadblock on Sunday. Negotiations are now paused, putting pressure on leaders to step into the breach later this week.
A weekend of intense negotiations—including a surprise dash by Brexit Secretary Dominic Raab to meet his EU counterpart Michel Barnier in Brussels—failed to break the deadlock.
There will be no further attempt to resolve the impasse before the EU summit in the Belgian capital on Wednesday, according to people familiar with the matter, and officials on both sides are concerned time is running out to get an agreement before the UK’s exit in March. Even so, Britain’s Foreign Secretary Jeremy Hunt said he’s optimistic a deal can ultimately be done. The pound was little changed against the dollar as of 11:10 a.m. in London, having fallen as much as 0.5 percent earlier.

Hopes Dashed
“Hopes of a decisive breakthrough in the Brexit negotiations at this week’s European Council have been thwarted by Theresa May’s limited room for maneuver at home,” Eurasia analyst Mujtaba Rahman said in a note to clients. “The decisive factor was enormous pressure from her own Cabinet, which compounded the problems she already had with Eurosceptic Tory MPs and Northern Ireland’s Democratic Unionist Party.”
The weekend was meant to be a chance to crack the thorniest issue in talks—what to do with the Irish border —so that leaders could declare progress at this week’s summit and signal that
a final deal could be signed in mid-November.
That timetable—which markets had started to price in—has been thrown off and there’s likely to be more talk of how to prepare for a chaotic and acrimonious no-deal split. A key meeting of EU governments scheduled for Monday was cancelled and negotiations will likely to be paused for some time, according to EU diplomats.

‘Sticking Point’
“I think everyone in the UK should have confidence that this Prime Minister, Theresa May, will never sign a deal that is not compatible with the letter and spirit of the referendum result,” Hunt told reporters in Luxembourg ahead of a scheduled meeting with his EU counterparts on Monday. “There are one or two very difficult outstanding issues, but I think we can get there.” German Foreign Minister Heiko Maas said on Twitter an agreement was still possible, warning that a no-deal Brexit carried economic risks. “I hope that in the end, reason takes the upper hand.”
The major sticking point remains how to avoid the need for a hard customs border at the land frontier between Northern Ireland and the Republic of Ireland after Brexit. One proposal is to keep the UK inside the EU’s customs union on a temporary basis, which would mean no new checks on goods passing from Northern Ireland to Ireland would be needed. But pro-Brexit ministers in May’s Tory party are determined to make sure any such arrangement has a strict end date, to avoid Britain being trapped inside EU rules and
tariffs indefinitely.