British negotiators were reported to have agreed outline rules with Ireland for their border after Brexit on Monday, sending the pound higher on hopes of a deal on EU free trade as Prime Minister Theresa May arrived for crunch talks in Brussels.
Britain's Daily Telegraph and Financial Times reported that London had agreed with Dublin, which has the backing of the European Union, to maintain regulatory "alignment" with the EU on both sides of the border to avoid a possible flare-up in the violence which troubled Northern Ireland for decades.
European Commission President Jean-Claude Juncker spoke to Irish Prime Minister Leo Varadkar by phone. EU lawmaker Philippe Lamberts, who met Juncker earlier on Monday, said the draft text on Ireland would commit Britain to "full alignment" on rules.
Donald Tusk, the EU summit chair, tweeted ebulliently after speaking to Irish Prime Minister Leo Varadkar that there was progress on the Irish issue to unblock UK-EU trade talks: "Tell me why I like Mondays!" the former Polish premier wrote.
"Encouraged after my phone call with (Varadkar)," he added. "Getting closer to sufficient progress at December (EU summit)."
This is code for Britain complying with a set of conditions the EU wants met on divorce terms before leaders will agree to launch talks on a future trade deal at a summit next week.
May and Juncker made no comment to reporters when they met at the EU executive's Berlaymont headquarters for a lunch that diplomats and officials hope can seal a breakthrough that would open the way to negotiations on future trade relations.
Tusk, cancelled a trip to Jerusalem and Ramallah and hastily scheduled his own meeting with May for after lunch. Officials said he was preparing to call round EU leaders to get agreement on trade negotiations. National envoys handling Brexit were also summoned urgently to a meeting in Brussels later on Monday.
London has broadly agreed to many of the EU's divorce terms, including paying out something like €50 billion. But the issues of the rights of expatriate citizens and the UK-EU border on the island of Ireland defied a deal until the last minute.
Brussels officials and diplomats sound moderately confident. But they cautioned that much will depend on the outcome of May's talks as to whether the EU will agree on "sufficient progress."
Elmar Brok, another member of the European Parliament who met Juncker and his Brexit negotiator, Michel Barnier, shortly before they met May, said "just a few words" had separated the sides and that there was a "very good chance" of agreement.
