The Prime Minister has denied caving into Brussels demands as she scrambles to get the plans back on track. She is pictured switching on the Christmas lights at Downing Street last night

EU warns UK government could fall next week

The EU fears Theresa May could be toppled as soon as next week if there is no deal on the Brexit divorce, it was claimed today.

Fears the Prime Minister could be replaced by a hard-line Brexiteer have prompted EU Commission President Jean-Claude Juncker to insist he is ready to meet the parties at any time.

The impasse over how to solve the Irish border after Brexit showed little line of easing today, days after DUP leader Arlene Foster dramatically halted the talks.

Irish Prime Minister Leo Varadkar last night said he expected to see a new draft of the proposed divorce deal today.

But DUP sources vowed to the Sun: ‘We’re going to slow it all down. This is a battle of who blinks first — and we’ve cut off our eyelids.’

If no agreement is reached in time for a summit next week, the next opportunity for talks will be March.

The Prime Minister has denied caving into Brussels demands as she scrambles to get the plans back on track. She is pictured switching on the Christmas lights at Downing Street last night

The Prime Minister has denied caving into Brussels demands as she scrambles to get the plans back on track. She is pictured switching on the Christmas lights at Downing Street last night

Leo Varadkar said Theresa May plans to propose suggestions on an Irish Border over the next 24 hours as she desperately tries to seal a Brexit divorce deal.

Leo Varadkar said Theresa May plans to propose suggestions on an Irish Border over the next 24 hours as she desperately tries to seal a Brexit divorce deal.

DUP leader Arlene Foster (pictured in Belfast on Monday night) refused to back down in a row over Brexit insisting she was just as 'unequivocal' as Dublin about the terms of the Irish border

DUP leader Arlene Foster (pictured in Belfast on Monday night) refused to back down in a row over Brexit insisting she was just as ‘unequivocal’ as Dublin about the terms of the Irish border

But the pressure for May is on, with one EU official telling The Telegraph: ‘Mr Juncker wants to support Mrs May to avoid the collapse of her government.

‘He is prepared to meet her at any time, including on days next week in the run up to the European summit.’

Another source said there was ‘wiggle-room’ to change the controversial wording in the agreement concerning the border between Northern Ireland and the Republic, that caused talks to fail on Monday.

The source said: ‘It’s a highly difficult situation for Theresa May and he [Juncker] wants to help her. It’s important that he supports her in everything she does.’

Despite Mr Juncker’s apparent flexibility, EU negotiator Michel Barnier has insisted the deal must be done by Friday if trade talks are to be started at the leaders summit in seven days.

May has also been threatened by her own MPs, some of whom have stressed she could be thrown out of Downing Street if she fails to secure a deal.

One Tory MP said it could be ‘a matter of weeks’ if the situation does not improve.

Possible successors include David Davis, Boris Johnson and Michael Gove – all three of whom are said to be prepared to take charge if others pushed May out.

Twenty MPs have written to May to attack pro-Brexit colleagues for being ‘highly irresponsible’ in risking a no-deal outcome for Britain.

The Irish prime minister yesterday said May wanted to ‘come back to us with some text tonight or tomorrow’.

He added: ‘I expressed my willingness to consider that because I want us to move to phase two if that is possible next week.’

Theresa May, pictured at PMQs yesterday, had planned to return to Brussels swiftly to try to complete a divorce deal with the EU, but this has been cancelled

Theresa May, pictured at PMQs yesterday, had planned to return to Brussels swiftly to try to complete a divorce deal with the EU, but this has been cancelled

May angrily denied caving into Brussels demands as she scrambles to get the EU divorce plans back on track.

NO TRADE TALKS FOR MONTHS UNLESS A DIVORCE DEAL IS DONE BY NEXT WEEK

Brexit trade talks might not start until the Spring unless a divorce deal is done in the coming days.

The EU summit taking place next Thursday and Friday is the last opportunity this year to get approval for the second phase of negotiations.

Unless leaders agree this time around that ‘sufficient progress’ has been made, it might have to wait until the next gathering in several months.

The EU has also been insisting that a deal must be thrashed out several days before the summit so it can be put out for ‘consultation’.

But in reality it is likely the arrangement over the Irish border – thought to be the biggest outstanding issue – could be settled by leaders on the night if it came to a crunch.

EU commission president Jean-Claude Juncker has made clear he is prepared to meet Mrs May at any point over the next week to try to clear the first phase.

But the DUP, who humiliatingly torpedoed the proposals just before Mrs May was due to seal them on Monday, have demanded more assurances they will not trigger the break-up of the UK.

Mr Varadkar previously warned he was ready to delay a decision on launching trade talks to beyond Christmas – even though it could raise the prospect of Britain leaving with ‘no deal’.

In a combative performance at PMQs, Mrs May defended her position, insisting no terms would be finalised until an overall deal was struck with the EU next year, and said the sides were ‘close’ to making progress on the first phase of negotiations.

The defence came after Mrs May was rebuked for playing a ‘risky game’ by keeping her top team and the DUP in the dark over plans for a ‘soft Brexit‘ deal with Brussels.

Mrs May was repeatedly urged to toughen up her stance by MPs in the Commons.

Tory backbencher Jacob Rees-Mogg said her Brexit red lines needed a ‘new coat of paint’, while hardline Eurosceptic Peter Bone offered to accompany her to Brussels to ‘sort out’ the Eurocrats.

Mrs May said: ‘We’re leaving the EU, we’re leaving the single market and the customs union but we will do what is right in the interests of the whole United Kingdom and nothing is agreed until everything is agreed.’

There is growing alarm on the Tory benches after David Davis confirmed some sectors of the UK economy could have to align with the EU after Brexit to resolve the Irish border issue.

DAVID DAVIS SAYS BREXIT IMPACT COULD BE ON SCALE OF CREDIT CRUNCH

David Davis, pictured in Parliament today, made the comment as Brexit talks have stalled after the DUP pulled the plug on the first stage of the deal on Monday afternoon
The Brexit Secretary is facing a frantic race against time to get the DUP signed up to a deal to move Brexit talks on to trade negotiations by Christmas

David Davis appeared before the Brexit select committee today

Brexit could have as big an impact on the British economy as the 2008 credit crunch, David Davis warned today.

The Brexit Secretary said quitting the Brussels club will amount to a ‘paradigm change’ comparable with the biggest financial slump since the Depression of the 1930s.

He made the extraordinary comment as he was called before the Brexit select committee where he admitted no Brexit impact assessments have been carried out by Whitehall.

He said an assessment of the potential impact of Brexit on different sectors of the UK economy would not necessarily be ‘informative’ as economic models ‘have all proven wrong’ in the past.

Mr Davis told the committee: ‘You don’t need to do a formal impact assessment to understand that if there is a regulatory hurdle between your producers and a market, there will be an impact.’

Former leader Iain Duncan Smith – who has acted as a bridge between No 10 and Eurosceptic MPs until now – described the proposal as ‘intolerable’ and suggested it was time to walk away from the talks.

‘We are beginning to stare at the edge of what is a price that we simply cannot afford to pay,’ he said.

DUP MP Jim Shannon challenged Mrs May over the situation at PMQs this afternoon.

‘Can you give a specific commitment that nothing will be done that creates any barrier constitutionally, politically, economically, or regulatory between NI and the rest of the UK?’ he asked.

She replied: ‘The simple answer is yes. He will know as other members will that there are already areas where there are specific arrangements between NI and Republic of Ireland, for example specific energy markets…

‘We want to make sure there is no hard border, that is what we’re working for, we are also working to protect the constitutional integrity of the UK and the internal market of the UK and I think we share those aims.’

Mr Bone, a leading Brexiteer, drew gales of laughter in the chamber by offering to act as the PM’s enforcer.

‘If we have a problem would it help if I came over to Brussels with you to sort them out?’ he said.

Mr Rees-Mogg, who yesterday congratulated the DUP on scuppering the proposed divorce deal, said: ‘Will she apply a new coat of paint to her red lines… they are looking a bit pink.’

Labour leader Jeremy Corbyn labelled the Government’s Brexit approach a ‘shambles’. But Mrs May shot back that Labour was in chaos over whether it wanted to stay in the European single market or not.

‘The only hard border around is right down the middle of the Labour Party,’ she said.

Labour leader Jeremy Corbyn labelled the Government's Brexit approach a 'shambles'. But Mrs May said Labour was in chaos over whether it wanted to stay in the European single market

Labour leader Jeremy Corbyn labelled the Government’s Brexit approach a ‘shambles’. But Mrs May said Labour was in chaos over whether it wanted to stay in the European single market

Peter Bone offered to come to Brussels with the PM and 'sort them out'
DUP MP Jim Shannon asked Mrs May for a commitment that Northern Ireland would not diverge from the UK

Peter Bone offered to come to Brussels with the PM and ‘sort them out’. DUP MP Jim Shannon asked Mrs May for a commitment that Northern Ireland would not diverge from the UK

Tory MP Jacob Rees-Mogg warned Mrs May she needed to put a 'new coat of paint' on her Brexit red lines

Tory MP Jacob Rees-Mogg warned Mrs May she needed to put a ‘new coat of paint’ on her Brexit red lines

Irish Taoiseach Mr Varadkar risked fuelling the row by arguing that the DUP did not represent everybody in Northern Ireland.

‘We need to bear in mind that there are a lot of different voices in Northern Ireland; we need to listen to them all, and all parties in Northern Ireland, not just one,’ he told the Dail parliament in Dublin yesterday.

He said his Government wanted to begin phase two of the UK-EU talks to address post-Brexit trade and acknowledged it was in the Republic’s own interest.

‘We want to move to phase two but if it is not possible to move to phase two next week then we can pick it up in the new year,’ he said.

He added that he stood by the text of a draft deal ‘agreed’ on Monday. In a phone call with Mrs May later, Mr Varadkar ‘reiterated the firm Irish position’, according to a spokesman.

Government sources insisted that the proposal on the Irish border was only a ‘backstop’ designed to open the door to trade talks this month.

Mr Davis, pictured giving evidence to MPs today, was in Brussels with Mrs May this week

Mr Davis, pictured giving evidence to MPs today, was in Brussels with Mrs May this week

What’s the truth about trade across the Irish border?

Analysis by Jack Doyle

Northern Ireland to Ireland

It might be assumed that trade between Northern Ireland and the Republic formed a very significant part of the province’s economy.

But official data shows its economic relationship with the rest of the UK is much more significant.

Around two thirds of Northern Ireland’s turnover involves sales within the province.

Exports to Great Britain make up 21 per cent, while those to the Republic are just five per cent and to the rest of the EU just three per cent.

DUP Sammy Wilson said Northern Irish trade with the UK is more important than with the Republic of Ireland and the rest of Europe

DUP Sammy Wilson said Northern Irish trade with the UK is more important than with the Republic of Ireland and the rest of Europe

According to the Legatum Institute think tank, trade patterns from before the UK joined the EU in 1973 have proved ‘remarkably resilient’.

DUP MP Sammy Wilson has said: ‘Our main market is not the Irish Republic. It is not even the whole of the EU. Our main market is the UK, and the integrity of the single UK market is far more important to us, to people who work in Northern Ireland, than having some kind of regulatory convergence or continuance with the rest of Europe.’

Ireland to Great Britain

By contrast to the relatively small scale of its trade with Northern Ireland, the Republic has very significant trade links with Great Britain, its second biggest trading partner. More than 12 per cent of Irish exports go to Great Britain, and 18 per cent of services (compared to 1.6 per cent to Northern Ireland).

It also imports a huge amount from Great Britain, which accounts for 25 per cent of its imports. But because of the size of the two economies, the Republic has a lot more to lose in relative terms from the talks collapsing and no agreement being made on trade.

Estimates of the damage to Irish GDP from a collapse in talks suggest it could fall by up to 3 per cent. Henry Newman, of the Open Europe think tank, warns the Irish have the most to lose of any EU state from no trade deal, and are ‘playing with fire’.

Posted on; DailyMail>>

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