EU leaders agree to banking union | Ireland

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European leaders had hoped to hold a special summit in November to seal the divorce, but on Wednesday they refused to sign off on the plan, taking the bloc a step closer to the potentially catastrophic scenario of Britain crashing out in March without a deal.

Furthermore, it is expected that the eventual agreement on the future UK-EU relationship will need to be ratified - not just by the UK parliament and the European Parliament, but also by each of the 27 EU member states.

But besides this protocol, Spanish and British authorities are working out several bilateral arrangements regarding practical issues affecting Gibraltar, such as taxes, the environment, tobacco smuggling and citizens' rights.

"That bilateral relation contains elements such as taxes, environmental cooperation, security, and the movement of workers between Gibraltar and the Campo de Gibraltar". Chief EU negotiator Michel Barnier said that "we need much time, much more time, and we continue to work in the next weeks".

"Brexit offers the prize of a better future, global free trade deals and political independence", said the letter.

But the idea is controversial among May's eurosceptic Conservative MPs, who fear it is simply a way of delaying Britain's exit.

Jacob Rees-Mogg, who serves as ad hoc leader of around 60 Bexiteer Tories, was among several MPs who have highlighted the fact that a longer transition would mean billions more in contributions to the European Union budget - "paying for the privilege" of remaining subject to Brussels with no say over European Union governance.

Mrs May faces potentially the most risky period of her leadership, with mutinous MPs lining up Ex-Brexit Secretary Mr Davis as her replacement, it is claimed.

Officials noted May had failed to respond to a call by EU President Donald Tusk for "concrete proposals" of her own to move the talks forward, and said more progress was needed.

But despite the blue-on-blue attacks dominating the newspapers this morning, is a Brexit deal actually more likely after this latest summit?

Upon her arrival at the European Union summit, May told reporters, "We have solved most of the issues in the withdrawal agreement".

European Union leaders have recently suggested that the transition period, now due to end in December 2020, could be extended by a year to provide more time for a trade deal to be forged that would make the backstop unnecessary.

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However, any extension would rile the likes of Boris Johnson and Jacob Rees-Mogg as it would mean the continuation of free movement and Britain paying billions more pounds into EU coffers as the United Kingdom effectively remained in the European single market and customs union. "The last stage will need courage, trust and leadership on both sides", she told leaders, according to an official.

He warned that solving the Irish border issue was a "prerequisite" for a successful outcome of Brexit negotiations, and that failure to find a resolution would spell disaster for striking any deal.

EU Brexit negotiator Michel Barnier told France Inter radio on Friday that "90% of the accord on the table has been agreed with Britain" but added: "I'm convinced a deal is necessary, I'm still not sure we'll get one".

So it looks like - for now at least - May will continue to try and thrash out a deal with the EU.

But asked if he was convinced an agreement would be reached, he replied: "I have no deep conviction on this subject, because in the United Kingdom the political situation is very complex and I don't know what decisions Theresa May will take".

The negotiations on the Withdrawal Agreement have been fraught. "It doesn't resolve any of the underlying issues and keeps us in a painful Brexit holding pattern".

May emphasised she did not expect the extension to be needed beyond the current date of December 2020, amid anger among eurosceptic members of her Conservative party that Britain could be tied to the European Union indefinitely.

Britain says it has not asked for an extension - but didn't rule it out Wednesday. It will also give companies and people on both sides time to prepare for the new arrangements.

'If you have a negotiator who has no strong mandate, it's very hard to negotiate'.

It must also be approved by Britain's Parliament, where May lacks an overall majority.

"We do not know what they want, they do not know themselves what they really want - that's the problem", she said.

Lithuanian President Dalia Grybauskaite said that 2 ½ years after Britain's Brexit referendum, the country had still not explained clearly how it wants to leave the EU.

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