Brexit hangs in the balance as EU doubts a deal this week

A deal to smooth Britain's departure from the European Union hung in the balance

on Monday after diplomats indicated the bloc wanted more concessions from Prime Minister Boris Johnson and said a full agreement was unlikely this week.

As the Brexit maelstrom spins ever faster, Johnson and EU

leaders face a tumultuous week of reckoning that could decide

whether the divorce is orderly, acrimonious or delayed yet

again.
Johnson says he wants to strike an exit deal at an EU summit

on Thursday and Friday to allow an orderly departure on Oct. 31.

But if an agreement is not possible he will lead the United

Kingdom out of the club it joined in 1973 without a deal - even

though parliament has passed a law saying he cannot do so.

EU politicians such as Irish Foreign Minister Simon Coveney

said a deal was possible and that much more work was needed. But

EU diplomats were pessimistic about the chances of Johnson's

hybrid customs proposal for the Irish border riddle.

"We are not very optimistic," a senior EU diplomat told

Reuters.
After more than three years of Brexit crisis and tortuous

negotiations that have claimed the scalps of two British prime

ministers, Johnson will have to ratify any last-minute deal in

parliament, which will sit in an extraordinary session on

Saturday for the first time since the 1982 Falklands War.

As EU ministers met in Luxembourg ahead of the leaders'

summit, Johnson's planned legislative agenda was read out by

Queen Elizabeth at the state opening of parliament.

"My government's priority has always been to secure the

United Kingdom's departure from the European Union on 31

October," the queen said from the House of Lords.
If Johnson is unable to clinch a deal, an acrimonious

divorce could follow that would divide the West, roil financial

markets and test the cohesion of the United Kingdom.

The pound was down 1% at $1.2517.
The main sticking point remains the border between EU member

Ireland and the British province of Northern Ireland: how to

prevent it becoming a backdoor into the EU after Brexit without

erecting controls that could undermine the 1998 peace agreement

that largely ended three decades of sectarian violence.

Brexit hangs in the balance
To get a done deal, Johnson must master the complexities of

the Irish border before getting the approval of Europe's biggest

powers and then sell any deal to the parliament in which he has

no majority and which he suspended unlawfully last month.

"Johnson doesn't have a majority for anything in
parliament," one EU official told Reuters.
The details of Johnson's proposals have not been published

but are essentially a compromise in which Northern Ireland is

formally in the United Kingdom's customs union but also

informally in the EU's customs union.
The main sticking point from the EU side is customs. The EU

is worried it would be impossible to ensure goods entering

Northern Ireland do not end up in the EU and is concerned about

the complexity of a system for charging tariffs on goods moved

between Britain and Northern Ireland.
"Such a hybrid customs territory like the British are

proposing for Northern Ireland does not work anywhere in the

world, it seems," an EU diplomat said.
"With this kind of system, with two sets of rules for the

same goods crossing the same border, there is more possibility

for fraud and it's extremely complicated to distinguish between

goods heading for Northern Ireland, or further to Ireland and

the single market."
In a sign that the Brexit optimism which followed Johnson's

meeting with Irish Prime Minister Leo Varadkar last week may

have been premature, EU diplomats now say the best chance of a

deal would be to keep Northern Ireland in the EU's customs

union.
That would be a step too far for Johnson's Northern Irish

allies, the Democratic Unionist Party, and many Brexit

supporters in his party.
If he fails to strike a deal with the EU, a law passed by

his opponents obliges him to seek a delay - the scenario that EU

diplomats think is most likely.
"It's up to the Brits do decide if they will ask for an

extension," European Commission head Jean-Claude Juncker said in

an interview with Austrian media outlet Kurier.
Extension options range from as short as an extra month to

half a year or longer. The other EU states would need to agree

unanimously to grant it.