The British Prime Minister must agree a deal on the first stage of the negotiations if the UK is to move onto discussing a future trade deal
Brexit: UK fails to make a deal with EU, although both sides say progress has been made
Britain and the European Union said they were confident they would be able to reach a deal on the first stage of the UK’s withdrawal negotiations from the bloc but were unable to conclude the talks on Monday.
The EU have insisted that Britain must make “sufficient progress” on three key issues- the rights of EU citizens, the Irish border and the divorce bill- if it is to move onto phase two of the talks, negotiating a future trade deal with the EU.
Britain’s Prime Minister Theresa May was in Brussels hoping to finalise a deal on Monday ahead of an EU summit on December 14-15.
Despite increasing numbers of reports that indicated a deal was about to be done on Monday afternoon, President of the European Commission Jean-Claude Juncker said a couple of issues still needed to be worked on.
Both Mr Juncker and Mrs May were keen to stress that progress had been made and said negotiations would continue over the rest of the week.
“I am confident that we will resume this positively,” Mrs May said at a joint press conference with the EC President before heading into a meeting with EU chief Donald Tusk.
It appeared that the Democratic Unionist Party, the Northern Irish party that is propping up Mrs May’s Conservative minority government, had intervened at the last minute, putting the deal on hold.
Mrs May is believed to have rang DUP leader Arlene Foster from Brussels after speaking with EU negotiators. Mrs Foster said she would not support any deal, which would compromise the “economic and constitutional integrity of the UK”.
Irish Prime Minister Leo Varadkar said a deal had been done but that pressure from the DUP had led the UK to apparently change its mind over the Irish border question.
"I am surprised and disappointed that the British government now appears not to be in a position to conclude what was agreed earlier today," he told a press conference in Dublin.
Meanwhile, Labour leader Jeremy Corbyn blamed the failure to reach a Brexit deal on "the grubby deal the Tories did with the DUP after the election".
Ireland has been the main sticking point of the negotiations, with Dublin and London disagreeing over how to manage the border after Brexit.
It appeared that a breakthrough had been made as Britain conceded to the Irish government’s insistence that no hard border would be reinstated between Northern Ireland and the Republic of Ireland. Ireland’s foreign minister Simon Coveney had previously sought guarantees that the UK would not deviate too far from EU standards on key areas such as health and agriculture after Britain leaves the bloc.
Dublin and London are believed to have agreed that there will continue to be regulatory alignment on both sides of the Irish border after March 2019.
A paragraph from the draft of the negotiating text seen by Ireland’s state broadcaster RTÉ News indicated the UK had agreed that there would be no divergence between the Republic of Ireland and Northern Ireland of the rules covering the EU single market and customs union after Brexit.
The reports led the DUP leader to make a statement on the matter, saying her party was opposed to committing Northern Ireland to any deal on regulatory divergence which would separate the region from the rest of the UK.
Mrs Foster said: "The DUP will not accept any kind of regulatory divergence that separates Northern Ireland from the rest of the UK."
A British government source told the Irish Times there was “a significant difference” between the phrase “continued regulatory alignment” and “no regulatory divergence” between Northern Ireland and the Republic of Ireland.
Mrs Foster did not say whether the DUP would be willing accept a deal which includes regulatory alignment with the Republic of Ireland.
Mrs May is reliant on the DUP to prop up her government via a confidence and supply agreement, after she failed to win a majority in the UK general election earlier in 2017.
It is not clear whether regulatory alignment would mean that Northern Ireland stays in the single market and the Customs Union, while the rest of the UK leaves.
London’s mayor Sadiq Khan, said if this was the case, then the British capital, where the majority of residents voted to remain in the EU, should also be allowed to stay in the EU bodies.
Similar comments were made by Scottish National Party leader Nicola Sturgeon, who said there was “no good practical reason” why other parts of the UK could retain “regulatory alignment” with the EU if Northern Ireland was permitted to.
Negotiations on the other two main issues- the divorce bill and EU citizens' rights- are believed to be almost finished.
Last week, the UK upped its offer to 50 billion euros (Dh217bn) to settle its accounts with the EU, according to various media reports.
While it is understood that three million citizens from other EU states who want to stay in the UK will not have to pay to apply for settled status. Settled status would mean those who have lived in the UK for five years would have the same rights to healthcare, education, benefits and pensions as British citizens.