Brussels and London finalize post-Brexit deal pending approval from Macron and Johnson

Environment of imminent agreement.

European and British negotiators are about to close the trade agreement that will regulate relations between the EU and the United Kingdom after the end of the Brexit transition period, on December 31.

The pound sterling has appreciated close to 1% and British bonds have registered their biggest rise in a month due to the possibility of an agreement that would avoid or, at least alleviate, the disturbances that the definitive exit of the United Kingdom from the internal market and from the customs union will cause the next January 1.

The negotiations, according to all the sources consulted, have entered the final hours and the outcome could be known this Wednesday, just before the Christmas break.

The negotiating teams, led by Michel Barnier on the European side, and David Frost, on the British side, have reached the end of their task and the only thing missing is the political acquiescence of the capitals, in particular London and Paris.

France is the country potentially most affected by the cut in fishing quotas in British waters that the agreement will entail and which has become the last stumbling block in the talks.

The approval of the Government of Emmanuel Macron is essential to finish the text.

On the other side, British Prime Minister Boris Johnson weighs the risk that the agreement, which will include the mutual opening of the British and European markets, will provoke a revolt among conservatives who defend a categorical Brexit and without any ties to the EU.

But London has verified in the last hours, as a result of the closing of borders to stop the spread of covid-19, the monumental damage that a rupture could cause without any kind of agreement.

The very revaluation of the British currency in the face of the imminence of a pact shows that the British side would be the hardest hit by a chaotic exit from the domestic market, a risk that has been on the table in recent weeks and that, in the absence of an agreement, would materialize on January 1.

But European sources envision the possibility of a definitive pact this Wednesday, which would end more than 10 months of tortuous negotiations.

Community sources indicate that reaching an agreement before Christmas would allow the Council of the EU to prepare the legal ground for the provisional entry of the pact on January 1, pending final ratification in the European Parliament in the first weeks of 2021.

Barnier already indicated this Tuesday that the contacts were approaching the time of the denouement, just over a week from December 31.

“We are really at a crucial moment;

we are giving the final push, ”Barnier told representatives of the 27 in Brussels.

Behind closed doors, Barnier reported that there has been progress and that most of the points are preliminarily agreed "or about to be," according to diplomatic sources.

The pending discrepancies, according to the European side, only concern the fishing sector.

Among the stumbling blocks that remained to be resolved were the calendars and catch rates for the fishing fleet in British waters.

Brussels could accept a cut in the value of catches of up to 25% over a transitional period of six or seven years, and on the contrary London demanded a cut of more than double and in just three years.

After tough negotiations, other stranded issues such as the guarantees of fair competition or the disciplinary mechanisms of the trade agreement itself were already considered overcome.

The buzz of the possible deal spread through Brussels and London at noon on Wednesday.

In the community capital the three institutions involved -Commission, Council and Parliament- are on guard against the possibility of an imminent white smoke.

The tight schedule will force speeding up procedures that, in other circumstances, could have taken weeks.

The draft Treaty must be reviewed, first, by the Committee of permanent representatives of the 27 partners in Brussels, with the rank of ambassadors.

The diplomatic green light should be confirmed by the 27 governments in the capitals.

And the European Parliament could convene an extraordinary plenary session or a meeting of the chairmen of the parliamentary groups to give its first opinion on the text.

Except for last minute changes, the European Parliament has ruled out the ratification of the Treaty before the end of the year, which will force Brussels to look for legal alternatives to guarantee that on January 1 there is no legal vacuum or border and customs chaos .

The most expeditious formula would be the provisional application of the Treaty, a power that falls to the 27 to decide. But Parliament rejects this possibility and although it cannot stop it, if carried out it could complicate the parliamentary processing of the agreement.

Parliament suggests as a middle way the provisional application only of the chapters of the treaty that are essential to preserve commercial traffic at the beginning of January and leave the complete ratification of the treaty for a few weeks later.