European Union pushing for October agreement

EconomicsNewsPolitics'Substantial costs to UK economy if no deal agreed on Brexit warns IMFJoe Mellor

EconomicsNewsPolitics'Substantial costs to UK economy if no deal agreed on Brexit warns IMFJoe Mellor

Each is urging the other to compromise, while European Union leaders issue constant warnings to Britain about the Brexit clock ticking. "I have always said these negotiations were going to be tough", she said.

Asked about the rejection of Chequers, May said she had expected that "at various stages of these negotiations, tactics would be used".

The PM's remarks came following an eventful two-day European Union summit in Austria, which also saw German Chancellor Angela Merkel talk of the need for "substantial progress" over the next four weeks and French President Emmanuel Macron describe leaders of the Brexit campaign who told British voters it would be easy as "liars".

"The trouble with the position the European Union took yesterday is it pushes people like me further into the camp of those who say "look, we told you so, there is no compromise or flexibility to be found on the European Union side".

The tone of the summit surprised many commentators, however, after briefings on both sides of the Channel beforehand that they would avoid any surprises.

She said she had held "frank" talks with Tusk, adding: "Yes, concerns have been raised and I want to know what those concerns are". It gave her an hour to prepare for a tense press conference, where May insisted on defending Chequers despite the setback.

"Time is running short", Irish Prime Minister Leo Varadkar told reporters. This would keep Northern Ireland under EU economic oversight if London and Brussels can not agree a trade pact to keep UK-EU borders open after a transition period ends in 2020 - an idea that May and a small party in the province that props up her minority government oppose.

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Mrs May promised to draw up alternative proposals to unblock the Irish border issue ahead of a crunch summit on October 18 - described as the "moment of truth" by Mr Tusk. Even in her private meeting with Mr Tusk, he had not given her any indication of the level of criticism he was about to make.

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"It is a backstop that will only apply unless a better solution is found", he said. "We are hiring extra staff and officials, bringing in IT system", he said.

Kurz said that failing to reach a deal "would be hard for Europe but it would be bad for the United Kingdom". "This does make things more hard".

May wants to keep the United Kingdom inside the bloc's single market for goods, but not services.

But let's face it, critics and political rivals of Theresa May were waiting and watching this summit for storm clouds to gather over Chequers.

Under May's proposals, Britain will seek a free trade area for goods with the European Union, largely by accepting a "common rulebook" for goods and British participation in European Union agencies that provide authorizations for goods. Parliament was very unlikely to support Chequers, it certainly will not allow more than Chequers. Luxembourg Prime Minister Xavier Bettel added: "It is an agreement, so we both have to find a compromise".

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"Chequers goes pop", declared Jacob Rees-Mogg, the chairman of the hard Brexit European Research Group, on Twitter.

Labour leader Jeremy Corbyn said Mrs May had shown herself "incapable of delivering a good Brexit deal", and shadow Brexit secretary Sir Keir Starmer accused her of being "in denial".

"They were projecting that Chequers wouldn't work for them but to do it in this way I thought was pretty disgusting actually".

"But we've got to stick with it".

In a letter to opposition leaders at Westminster, Nicola Sturgeon yesterday called for the Brexit timetable to be extended in the event that no deal is reached, to "avoid an economic cliff edge".

The prime minister also said she would present a counter-proposal to resolve the impasse over the Irish backstop, an EU proposal stipulating that if a free trade agreement can not be signed after Brexit then Northern Ireland would remain in the customs union, creating a trade border down the Irish Sea.

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