(Bloomberg) -- Theresa May’s efforts to find a compromise on the Irish border that can unblock Brexit talks struggled on, with both sides digging in and the Northern Irish party that props up her government threatening to withdraw its support.
Irish Foreign Minister Simon Coveney rejected “creative ambiguity” on the intractable issue and called for Britain to come up with credible language to guarantee that Brexit won’t create a hard border on the island of Ireland. Northern Ireland’s Democratic Unionists, who have more clout than ever because they allow May to govern in London, made their opposition to any compromise clear.
“If they stop defending the union, we stop voting for them,” Democratic Unionist lawmaker Sammy Wilson said in an interview. “It’s as simple as that.”
The EU has set May a deadline of Monday to present a proposal on avoiding a hard border in Ireland after Brexit, as well as an improved offer on the divorce bill. Otherwise, according to the EU side, there won’t be time to orchestrate the breakthrough in talks that both sides are aiming for by year-end.
But according to a European official familiar with Irish thinking, the Irish government isn’t working to the Dec. 4 deadline and says talks can continue beyond that with a view to reaching an agreement by a summit in mid-December. On Dec. 4 May has lunch with European Commission President Jean-Claude Juncker in a meeting that’s meant to pave the way for an announcement at the summit that talks can move on to the crucial trade arrangements for after Brexit.
Businesses are clamoring for a December deal and the pound has rallied on hopes there will be one. The pound trimmed its gains late on Thursday to $1.3501.
‘So Be It’
“Hopefully we will make progress that will allow us to move onto phase two in the middle of December,” Coveney told lawmakers in Dublin on Thursday. “If it is not possible to do that, so be it.”
European Council President Donald Tusk visits Dublin on Friday.
May is seeking to solve the all-but-impossible riddle of how to prevent a policed barrier going up between Northern Ireland and the Republic of Ireland when the 300-mile line dividing them becomes the U.K.’s new frontier with the EU. The issue is the main obstacle in talks after an outline deal on the financial settlement was reached.
Reiterating commitments to the Good Friday Agreement that brought peace to Ireland after decades of violence could be part of the solution, according to four European officials. But Ireland is insisting on a written commitment that goes further, and makes sure regulations on each side of the border won’t diverge significantly after Brexit, one of the officials said.
Ireland wants no border at all -- for historic, political and economic reasons -- and the EU has adopted the same stance. But no border means keeping Northern Ireland aligned with the regulations that apply in the Republic, and that could mean erecting barriers between Northern Ireland and mainland Britain -- a red line for the DUP. May lost her majority in Parliament in June and has since relied on the DUP.
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The Times of London reported that the solution could hinge on giving Northern Ireland more powers locally over customs, energy and agriculture as a way to keep rules the same on each side of the border after Brexit. The U.K. proposal commits it to working to avoid regulatory divergence on the island of Ireland, the paper said.
The DUP’s Wilson rejected that option outright, while a European official familiar with Irish thinking said it wouldn’t go far enough for Dublin.
One European official said the chances of an agreement on the Irish issue by next week were 60-40. Another European official saw a 50-50 chance.
As both sides work toward a breakthrough in December, the prize they are aiming for won’t be celebrated for long. The second phase of talks is set to be even more complicated than the first as the two sides are going in to trade talks with wildly different expectations of what they want to achieve. Time will be short to hash out anything more than an outline deal, and the risk of an angry walkout remains.
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