Michel Barnier says Brexit deal still 'realistic' as deadline looms

Pound jumps against dollar on foreign exchange markets following comments

It is “realistic” to believe Britain and the EU will sign a Brexit withdrawal agreement before the looming deadline, Michel Barnier has said.

Speaking at the Bled Strategic Forum conference in Slovenia the EU’s chief negotiator said a deal was “possible” in the next six to eight weeks – the cutoff date set for talks.

The pound jumped by nearly 1 per cent against the dollar on the foreign exchange markets following the comments, after traders apparently over-interpreted the official’s words.

“If we are realistic, I want to reach an agreement on the first stage of the negotiation, which is the Brexit treaty, within six or eight weeks,” Mr Barnier said.

He added: “The treaty is clear, we have two years to reach an agreement before they leave... in March 2019.

“That means that taking into account the time necessary for the ratification process in the House of Commons on one side, the European Parliament and the Council on the other side, we must reach an agreement before the beginning of November. I think it is possible.”

The episode comes around a week after jumpy financial markets also boosted the pound after Mr Barnier repeated his mantra about wanting to do an ambitious and unique trade deal with the UK.

If we are realistic, I want to reach an agreement on the first stage of the negotiation, which is the Brexit treaty, within six or eight weeks

Michel Barnier, EU chief Brexit negotiator

Though little has changed on the ground, both sides of talks are staying publicly positive – if only to give them the upper hand in any ensuing blame game that follows a no deal.

The next staging post on the road to Brexit is expected to be in Salzburg, where EU leaders will meet for an informal summit next week. Leaders are expected to discuss the UK’s withdrawal, and could agree to a further summit dedicated to Brexit in mid-November, though this is yet to be confirmed.

It was reported in the Financial Times that Mr Barnier’s mandate, set by member states, could be revised in order to smooth the way to a deal.

The main issue preventing a withdrawal agreement is the question of the Northern Ireland border, and the European Commission has for months been working on a way to “de-dramatise” their proposal for a backstop to make it more palatable to the UK.

Theresa May has said she believes the plans in their current form, keeping Northern Ireland in the EU customs area would amount to a loss of sovereignty for Britain and that “no UK prime minister” could agree to them.