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U.K.’s Theresa May Says Brexit Negotiations Have Reached ‘an Impasse’


LONDON—Negotiations over the U.K.’s departure from the European Union took a bitter turn Friday as leaders from both sides accused the other of unreasonable demands, leaving investors panicked about an impasse with only six months left until Britain and the bloc part ways.

Following a tense meeting earlier this week in Salzburg, Austria, where European leaders rejected her post-Brexit plans as unworkable, British Prime Minister Theresa May said it was now up to them to smooth the path for a Brexit that doesn’t cause both sides undue economic and commercial pain.

“We now need to hear from the EU what the real issues are and what their alternative is so that we can discuss them,” Mrs. May said, standing in front of two Union Jack flags on Downing Street. “Until we do, we cannot make progress.”

Investors are getting increasingly more nervous that the talks will break down, leaving the U.K. to plunge out of the EU without an exit deal. The pound ended the day 1.4% lower against the dollar and down 1.2% against the euro, its biggest one-day drop since November.

European Council President Donald Tusk responded to Mrs. May’s remarks with a written statement Friday evening in which he laid the responsibility for the tensions in Salzburg largely on London. He sent no signal the EU would meet her demand to present a detailed response to her so-called Chequers plan, which aims to secure British firms frictionless access to the EU market in goods after the U.K.’s exit. The British stance, Mr. Tusk said, “was surprisingly tough and in fact uncompromising.”

Mrs. May’s remarks appeared aimed at showing resolve ahead of the Conservative Party conference this month, where she will have to unite a political party deeply fractured by Brexit. She has faced heavy criticism in the U.K. for the perceived humiliation of the slap-down by EU leaders at the conference in Austria. Mr. Tusk said the EU’s remaining 27 members thought Britain’s proposed economic framework “will not work.”

“Yesterday Donald Tusk said our proposals would undermine the single market,” Mrs. May said on Friday. “He didn’t explain how in any detail or make any counterproposal. So we are at an impasse.”

The U.K. government’s Brexit proposal may now need to be altered from July’s so-called Chequers proposal, analysts say. With less than 200 days until the U.K. formally quits the bloc in late March, EU leaders have warned that time is running out. A final deal should be wrapped up by November to leave enough time for it to be ratified by governments on both sides of the negotiations.

Looming over both sides is the threat of a “no deal” Brexit that sees the U.K. crash out of the EU, a scenario that has the potential to cause economic upset in the U.K. and the bloc alike. Both sides have said they wish to avoid that outcome. An official from the EU’s executive arm said the European Commission “is [contributing] and will contribute to work constructively” to achieve a deal.

Yet the point of departure for such work remains uncertain. On Friday Mr. Tusk said the EU had studied the British Chequers proposal seriously. “The results of our analysis had been known to the British side in every detail for many weeks,” he said.

Still, the EU leader said he believed “a compromise, good for all, is still possible.” Earlier Friday, Mrs. May had also offered an apparent olive branch to her EU counterparts, assuring EU citizens living in the U.K. that their rights would be protected in the event of a “no-deal” Brexit.

British Prime Minister Theresa May makes a statement on Brexit negotiations at Number 10 Downing Street on Friday.


Photo:

Jack Taylor/Getty Images

A key sticking point remains what happens to Northern Ireland should the Brexit talks collapse. The EU wants Northern Ireland, which is part of the U.K., to continue following a swath of EU rules and for customs and regulatory checks to take place between mainland Britain and Northern Ireland. But Mrs. May said cleaving Northern Ireland being from the U.K. was unacceptable. Her government will set out an alternative plan, she added, but didn’t specify when.

Meanwhile, Mrs. May is battling to shore up support at home. With the Conservative Party conference less than two weeks away, the prime minister used the intervention to try to bolster her credentials with the Brexit contingent of her party. She reiterated that she would not “overturn the results of the referendum” and stated that she was working “day and night” for a deal that would see the U.K. leave the EU.

Only after the conference will Mrs. May be in any position to re-engage with Brussels and the leaders of the other 27 EU countries. Both sides will need to find common ground during a crucial two-week period ahead of an October summit of EU leaders, which the bloc says will be a moment of truth for the negotiations.

Write to Max Colchester at [email protected]


Source : WSJ

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