UK, Germany drop key Brexit, easing path to deal

London, September 6: The British and German governments have abandoned key Brexit demands, potentially easing the path for the U.K. to strike a deal with the European Union, people familiar with the matter said. Germany is ready to accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a divorce deal done, according to people speaking on condition of anonymity because the discussions are private.

 

The shift away from the demand for extensive detail before exit day means that widespread opposition to U.K. Prime Minister Theresa May’s proposals for the future -- known as her Chequers plan -- isn’t necessarily a barrier to getting a deal. That’s because Brexit is being done in two parts: first the separation agreement to make sure the exit is orderly, and then the future trade accord, which won’t be negotiated until after the U.K. leaves.

The issue of how to avoid a new border on the island of Ireland remains a hurdle to an agreement, although there are also signs of potential progress there. Still, whatever deal May gets is likely to face opposition in the U.K. Parliament when she brings it back for approval.

The pound rose on the news, trading as much as 1 percent higher before paring gains after Reuters cited a German government spokesman saying the country’s Brexit stance hadn’t changed.