May eyes Brussels return to secure deal before Sunday summit
UK Prime Minister Theresa May will travel to Brussels on Saturday to try and secure a Brexit agreement before the Sunday crunch European Union summit where leaders will decide whether or not to sign off the deal.
German leader Angela Merkel threatened to boycott the Sunday summit unless all negotiations are concluded beforehand.
Significant issues arose as May met European Commission president Jean-Claude Juncker in Brussels on Wednesday to finalise the exit package for the UK, which both sides decided would need to be further discussed over the weekend.
The issues include a “total blockage” over whether Gibraltar should be covered by the declaration, with Spain having warned it would veto any Brexit package unless changes are made to both Britain’s exit treaty and separate declaration on future relations regarding Gibraltar.
“The situation is quite serious. There is a genuine feeling of concern and incomprehension that Madrid may be prepared to risk a Brexit deadlock,” an EU diplomat told the Financial Times, though Spain was standing alone on this issue.
Other issues include May’s push for references to “frictionless” goods trade in future, as well as EU demands that its fishing rights in UK waters be unaffected by Brexit.
No 10 sources told the BBC they expected a solution before Sunday's gathering of EU leaders.
The EU is now in a race against time to complete the text of an accompanying declaration on its future relations with the UK as German Chancellor Angela Merkel indicated she will not attend Sunday's meeting unless the text on future co-operation is agreed in advance.
Although May said there was progress in talks with the EU, the deal would still need to be approved by the UK parliament where it is unclear that the PM has enough support. This uncertainty is making the markets wary and could also negatively affect currencies.
David Madden, market analyst at CMC Markets said: "The constant Brexit related news provides the background noise, but any indication the UK is heading for ‘no deal’, is likely to send the pound lower."