EU, UK struggle to nail down Brexit deal

There were mixed messages as negotiators from both sides of the Channel on Wednesday resumed discussions to avoid a disorderly Brexit.

The UK and EU teams only had a short break after a marathon session to nail down the fine details of their Brexit agreement went into the early hours. 

As the two sides hunkered down, French Finance Minister Bruno Le Maire told French broadcaster Europe 1 that he saw a "glimmer of hope."

The office of UK Prime Minister Boris Johnson also said the talks were resuming after a "constructive" session.

However, separate sources in the UK government indicated that the chances of a deal were now "shrinking." On currency markets, the pound sterling was seen to falter after gains earlier in the week, amid concerns that talks were stalling.

EU Migration Comissioner Dimitris Avramopoulos, who attended a Wednesday morning briefing by EU chief negotiator Michel Barnier, said that "talks have been constructive but there still remain a number of significant issues to resolve."

Speaking on Tuesday, Barnier said  three primary sticking points remained:

• Customs arrangements for the island of Ireland
• The issue of giving Northern Irish authorities a greater say over regulatory arrangements, and the ability to veto them
• Guarantees of a level playing field — that Britain will not be at an unfair advantage when it comes to business regulation

Even if a legal text can be ironed out at ministerial level, any agreement reached would still face the prospect of being scuppered at a political level.

Read more: Johnson would send Brexit extension letter if no agreement, court told

Johnson may struggle to convince hard-line Conservative euroskeptic lawmakers, plus his allies from Northern Ireland's Democratic Unionist Party (DUP), that the UK can make any further concessions.

Meanwhile, the 27 member states and the European parliament would also be reluctant to make concessions on the level playing field or Northern Ireland.

Chancellor Angela Merkel and French President Emmanuel Macron were set to meet in France on Wednesday for their annual summit — a day ahead of the EU leaders' gathering that will decide on any potential Brexit withdrawal deal.

If a deal is to be struck, it will need, at minimum, the blessing of the EU's two most powerful members ahead of a full summit of EU government leaders on Thursday and Friday.

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