EU makes new Brexit offer in bid to break impasse

[BRUSSELS] UK Prime Minister Theresa May on Friday will tell the European Union (EU) that the outcome of a historic vote on her Brexit deal next week is in its hands, as signs emerged that the two sides are at least trying to make progress toward a deal.

The EU made a new offer in a bid to break the Brexit impasse, though it falls short of what Britain has demanded, people familiar with the EU side of the negotiations said.

Mrs May will on Friday seek to shift the blame onto the EU and say she still hopes to get legally binding changes ahead of the vote next week in the British Parliament on whether to approve her Brexit deal.

"We are working with them, but the decisions that the European Union makes over the next few days will have a big impact on the outcome of the vote" she will say in a speech in Grimsby, an English fishing port that voted strongly for Brexit in 2016.

Negotiators are racing against the clock to make additions and assurances that everyone can agree on. Talks have been acrimonious as the EU and the UK try to find a way to make the so-called Irish backstop more palatable.

With the March 29 deadline looming, European and British officials were becoming increasingly gloomy about the prospect of a breakthrough, with Britain accusing the bloc of intransigence and European negotiators irritated by the latest negotiator May has sent in to seek concessions, Attorney General Geoffrey Cox.

Talks are expected to continue into the weekend, and if they fail, Parliament will likely vote against Mrs May's deal for the second time, plunging the country into political chaos.

It's unclear if the EU's new proposal will be enough. But it aims to bolster the review system that's already set out in the deal, according to the people who spoke on condition of anonymity. These check-ins are scheduled every six months to help track and speed up the process of replacing the backstop with a better solution.

Many UK lawmakers say the backstop risks binding the UK to EU rules forever, especially since the UK cannot exit it unilaterally. Now officials are trying to deliver legally binding assurances to them that it won't happen.

The EU's new plan goes further than concessions outlined in a letter to Mrs May from European Commission president Jean-Claude Juncker and council president Donald Tusk in January, according to the officials.

But they fall far short of the demands made by Mr Cox this week, which the EU flatly rejected. He wanted a change to the arbitration system set out in the deal to make it easier for the UK to leave the backstop without the EU's approval. The EU is waiting for the UK to respond.

That would be tantamount to reopening the Brexit deal - agreed by the two sides in November - which European leaders have said must not happen.

Even if Mrs May accepts the latest proposal, EU officials are still pessimistic about whether it will work in convincing British lawmakers to back the deal in a vote on Tuesday. Just two months ago, Parliament rejected the deal in the largest defeat for a UK government in over a century.

Some European governments have given up hope of much progress before the UK is scheduled to leave the bloc March 29 and believe a Brexit delay is inevitable. If Mrs May's deal fails to pass next week, she has promised MPs they will be able to vote on whether to leave the EU without a deal at the end of the month or delay Brexit.

Officials say the next 72 hours are crucial as negotiators continue to thrash out ideas for the backstop. Mrs May could go to Brussels to finalise the deal before the vote, but this is by no means certain, EU officials said.

There is no agreement yet over how the concessions will be formalised, the people said. Possibilities include a further exchange of letters between the two sides, a joint declaration that interprets the original deal, or legal statements from each side.

BLOOMBERG