Fears are growing that Britain could yet crash out without a deal
Prime Minister Theresa May said she had made "progress" in talks with the EU on Wednesday as she sought to extract concessions on the terms of Britain's divorce, but as expected there was no major breakthrough.
With less than six weeks until Brexit day, May met European Commission president Jean-Claude Juncker hoping for movement on the "Irish backstop" issue -- after EU leaders insisted they would not restart negotiations.
Fears are growing that Britain could yet crash out without a deal, and there was fresh drama just before May headed to Brussels as three of her MPs resigned from her Conservative party in protest over Brexit to join a new independent group of lawmakers.
Citing the risk of a "hard" Brexit, ratings agency Fitch on Wednesday warned it could downgrade Britain, while the pound slipped against the US dollar.
A joint statement from May and Juncker called their meeting "constructive", striking a slightly more positive tone than when they met a fortnight ago.
"The two leaders agreed that talks had been constructive, and they urged their respective teams to continue to explore the options in a positive spirit," the statement said.
Separately, May said she had stressed the need for "legally binding changes to the backstop" -- though the EU has ruled this out.
"We’ve agreed that work to find a solution will continue at pace, time is of the essence and it’s in both our interests that when the UK leaves the EU it does so in an orderly way. And so we’ve made progress," May said.
May and the other 27 EU leaders approved a Brexit withdrawal agreement at a summit on November 25 last year, but the British leader's own parliament rejected it overwhelmingly on January 15.
Since then, May and her ministers have repeatedly met EU leaders and their negotiator Michel Barnier to urge them to reopen the text to find a way to appease eurosceptic MPs.
'Backstop' stumbling block
The main stumbling block has been the Irish backstop, which provides for Britain to remain in the EU customs union until a way is found -- such as a future free trade deal -- to ensure that Ireland's border with Northern Ireland remains open.
Brexiteers in May's own Conservative party see this as a "trap" to keep Britain tied to the bloc indefinitely, and have demanded a time limit or exit clause.
But such a clause would be seen in Brussels as a betrayal of EU member Ireland and has consistently been given short shrift by EU officials.
May and Juncker's statement indicated a fresh push to see what guarantees the EU could offer on the backstop to convince sceptical MPs it will not be used to trap Britain.
It also suggested the political declaration outlining plans for future EU-UK ties could be beefed up to "increase confidence" that both sides will try to reach a future deal as soon as possible, so the backstop never has to be used.
May said her Brexit Minister Stephen Barclay and Attorney General Geoffrey Cox would be back in Brussels on Thursday -- just three days since their last visit -- as the pace of negotiations picks up.
A European source said Cox, whose legal analysis of May's deal confirmed Brexiteer fears, will have a key role to play.
If Brussels does enough on the backstop to persuade Cox to soften his advice, it could help swing the parliamentary arithmetic behind the prime minister.
Without a deal, Britain is due to leave the Union abruptly after four decades on March 29, with no follow-on agreement or transition period to manage trade and economic relations.
Opposition Labour leader Jeremy Corbyn will meet Barnier on Thursday.
Officials in both Brussels and London have played down talk that an EU-Arab League summit in Egypt this weekend could become a "Brexit in the desert" meet, insisting the issue would not hijack the gathering.
Economic chaos feared
Both sides have said they want to avoid a no deal Brexit, and many experts foresee economic chaos, even warning of food and medicine shortages or a renewed threat of unrest in Northern Ireland.
Manufacturing supply chains could be disrupted, and Brexit uncertainty has already been cited as a contributing factor in the closure or departure of several British-based businesses.
On the EU side, the commission on Wednesday published an update on its no-deal planning, with seven out of 19 legal proposals to mitigate the effects now approved.
One option to avoid no deal would be for Brussels to accord Britain an extension to the March 29 deadline, although May insists she will not request a delay.
A delay could keep Britain inside the EU for May 23-26 elections for a new European Parliament, which will start sitting from July 2, presumably without any British members.