Britain must present the European Union with a good offer this week on the terms of its divorce from the bloc, or it will be too late for the EU to prepare for mid-December the start of talks on a future trade deal, a senior EU diplomat said.
“The ‘deadline of deadlines’ is this week,” the diplomat said when asked how much time the EU and Britain have for a deal to ensure the 27 remaining members of the bloc can prepare the opening of trade talks with London at a summit on Dec 14-15.
The diplomat, who has insight into the negotiations, said the EU hoped to get a “good” proposal on Wednesday, a day when Prime Minister Theresa May might also come to Brussels.
The offer from Britain must deal with three divorce issues -- a financial settlement, the rights of EU citizens in Britain and British citizens in the EU, and a way to avoid establishing a physical border between Northern Ireland and Ireland.
Talks on a deal broke down on Monday over the Northern Ireland border issue.
Hardliners in May’s government want to ensure Britain is not bound by EU regulations after it leaves the bloc, but that has proven difficult to reconcile with the 1998 Good Friday peace agreement, which promises an unguarded border between British-ruled Northern Ireland and the Irish Republic.
“If a proposal doesn’t come this week, the EU 27 won’t have enough time to prepare new guidelines for the summit,” the diplomat said.
London is keen to start as soon as possible talks with the EU on the terms of an up to 2-year transition period after Britain leaves in March 2019, and a future free trade deal.
Both agreements are key to keep British-based companies from moving to the continent soon because of uncertainty if they can continue to do business, unobstructed as now, with the EU’s remaining 440 million consumers.
Financial institutions based in the City of London have already started hedging their bets by moving part of their operations to mainland Europe and car-makers and big pharmaceutical firms are considering such a move.
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