Not there yet but closer: Britain and EU haggling over Brexit compromise
By Kylie MacLellan and Gabriela Baczynska LONDON/BRUSSELS (Reuters) - Britain and the European Union on Thursday played down the chances of clinching an immediate Brexit divorce deal but diplomats said they were moving closer to a legal compromise that Prime Minister Theresa May hopes will win over the British parliament.
By Kylie MacLellan and Gabriela Baczynska
LONDON/BRUSSELS (Reuters) - Britain and the European Union on Thursday played down the chances of clinching an immediate Brexit divorce deal but diplomats said they were moving closer to a legal compromise that Prime Minister Theresa May hopes will win over the British parliament.
May is trying to get changes to the divorce package before putting it to another vote in parliament. If she fails, May will have to decide whether to delay Brexit or endanger the world's fifth largest economy by leaving without a deal on March 29.
Philip Hammond, May's finance minister, raised hopes that a revised deal was on the cards by saying lawmakers could get an opportunity as early as next week to vote on a revised deal.
But within hours of Hammond's comments, a British government source, speaking on condition of anonymity, played down the likelihood of a deal within days.
"It doesn't feel like we will have a deal by next week," the source said.
May's biggest problem is the so called Irish backstop, an insurance policy to keep the border open between the British province of Northern Ireland and EU member Ireland if a future trade deal falls short after Brexit.
Parliament instructed her to replace the backstop by reopening the Withdrawal Agreement, but the EU ruled that out.
Diplomats said the two sides were moving towards a separate legal statement in which the bloc would again stress the temporary nature of the backstop for the Irish border.
They spoke of a "parallel declaration" or "interpretative instrument" on the backstop, a day after May and the head of the European Union's executive, Jean-Claude Juncker, met in Brussels to seek a way out of the Brexit deadlock.
"We are also looking at updating the declaration on future EU-UK ties after Brexit to give more prominence to the 'alternative arrangements' sought by Britain," said one EU diplomat who deals with Brexit.
"But May won't get any firm wording before Feb. 28."
Britain is seeking legal assurances that show the backstop is temporary, one of the key concerns of many Brexit-supporting members of her party who fear Britain could be locked into EU rules indefinitely by the backstop.
Brexit-supporting members of May's Conservative Party have been conspicuous by their silence about the move from aiming to replace the backstop as they demanded to a legal addendum of some kind.
May, once a reluctant supporter of EU membership who won the top job in the political chaos following the 2016 referendum, has promised to give lawmakers a chance to decide what to do about Brexit on Feb. 27 unless she can bring back a deal.
A second diplomat, briefed on the May-Juncker talks, confirmed the EU would only signal this was the direction of travel before May faces another more votes parliament.
"The parliament needs first to indicate clearly this option would then gain their support in the form of ratifying the Brexit deal. If they do that, we hone out exact words in the second week of March and it goes to the summit for approval."
The likely focus of the Feb. 27 debate in parliament will be whether lawmakers should grab control of the exit process from the May, a radical plan rejected in a slightly different form on Jan. 29.
May will have a further chance to lobby EU leaders at the weekend in the Egyptian resort of Sharm el-Sheikh during an EU-Arab League summit focused on migration, trade and security.
British lawmakers voted 432-202 against her deal on Jan. 15, the worst defeat in modern British parliamentary history.
With the clock ticking down to March 29, the date set in law for Brexit, Britain is ensnared in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project that it joined in 1973.
Hammond said May's talks with Juncker, had gone well and that the sides were talking about giving some guarantees that the backstop could only be a "temporary arrangement".
Discussions have focused on what May and Juncker in a joint statement called "appropriate legal assurance to both sides".
Brexit minister Steve Barclay was in Brussels on Thursday for more talks along with the Attorney General Geoffrey Cox.
Juncker said he was pessimistic about the chances of Britain leaving the European Union with a deal and warned the failure to agree an orderly divorce would be economically devastating.
"If no deal were to happen, and I cannot exclude this, this would have terrible economic and social consequences in Britain and on the continent," he said. "But I am not very optimistic when it comes to this issue."
(Additional reporting by Jan Strupczewski in Brussels and Andrew MacAskill in London; Writing by Guy Faulconbridge; Editing by Alison Williams)
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