Dutch PM 'cautiously optimistic' about progress on Brexit talks

European Commission spokesman Margaritis Schinas updated reporters on Mr Barnier's comments

EU leaders are due to meet for dinner in Brussels next Wednesday and hope to agree a withdrawal treaty with Britain that Barnier said was 80-85 per cent ready but on which obstacles remain, notably on how to keep the new EU-UK land border with Northern Ireland from reviving conflict in the British province.

The Prime Minister was reported to have played down the prospects of a breakthrough at next week's EU summit in Brussels, billed as the "moment of truth" by European Council president Donald Tusk.

"It was a warning: 'Don't take us for granted, we're in an agreement with you, but it's a two-sided agreement".

Barnier said customs forms could be completed in advance online and the "only visible systematic checks" would involve scanning bar codes on lorries or containers on ferries or in ports.

Barnier said Brexit would trigger the need for customs, Value-Added Tax and compliance checks with EU standards between Ireland and Northern Ireland in the event that a planned "backstop" were triggered because a future EU-UK trade deal was not sufficient in itself to ensure the land frontier was not a "hard border".

The Democratic Unionist Party, which props up Prime Minister Theresa May's Conservative government, threatened to vote against the forthcoming budget if she makes a deal that disadvantages Northern Ireland.

Barnier said he realised such checks were politically hard but this was the effect of Britons voting to leave the EU.

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However Brexiteers - including Brexit Secretary Dominic Raab - are insisting any arrangement which would see the United Kingdom effectively remain part of the customs union while negotiations over a free trade deal take place must be strictly time-limited - something the EU has been resisting.

Barnier also hit out at May's post-Brexit plan to keep the United Kingdom aligned to the EU on goods but not other areas as it would give British business "a major competitive advantage" over its European counterparts.

His comments came after a translation of a speech given by European Union chief Brexit negotiator Michel Barnier sparked confusion about the state of play in negotiations.

The OBR said weaker economic activity and higher prices could result from a no-deal Brexit.

Both the European Union and Britain have signalled progress in recent days, boosting sentiment in financial markets which fear the most damaging no-deal Brexit.

"That is why the no-deal is not and has never been our (preferred) scenario, even if our responsibility is to be prepared", he said.

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