Britain is due to leave the EU on March 29 — the first country ever to do so — but British lawmakers have rejected a draft deal sealed by May and her EU counterparts in November. Both they and EU lawmakers must endorse any agreement.
"I think the signals we are getting are reasonably positive," Foreign Secretary Jeremy Hunt told the BBC. "I don't want to overstate them because I still think there's a lot of work to do, but I think they do understand that we are being sincere."
EU chief negotiator Michel Barnier was due to meet U.K. Brexit Secretary Stephen Barclay and Attorney General Geoffrey Cox in Brussels later on Tuesday seeking to break the deadlock. The objections in London center on a provision demanded by Brussels to guarantee there are no barriers along the currently invisible border between EU member state Ireland and Northern Ireland, which is part of the U.K. Britain wants reassurances that this mechanism would be temporary.
EU leaders insist that the legally binding divorce agreement governing Britain's departure can't be reopened. But Hunt told the BBC that his country is "prepared to be flexible" about how changes are achieved, and argued that the Europeans are coming around to the idea that May "can get a majority in Parliament."
With time running out, the chances of Britain crashing out without any deal at all are growing, although Hunt said his government wants to avoid such a potentially devastating scenario. EU leaders want to avoid that too.
In Poland, leaders were discussing Tuesday a plan to prepare for that eventuality. Prime Minister Mateusz Morawiecki and his Cabinet were taking up the draft legislation during their regular weekly meeting Tuesday. Konrad Szymanski, a deputy foreign minister responsible for European issues, told Polish news agency PAP that the plan should help alleviate the most acute consequences of a no-deal Brexit.
Also hanging in the balance is the fate of hundreds of thousands of Poles who have settled in the U.K. since Poland joined the EU in 2004. The Bank of England has warned that "significant market volatility" is likely if Britain crashes out.
Minutes of the recent meeting of the bank's Financial Policy Committee warned that in a "disorderly Brexit," a range of financial assets, including the pound and stocks, "would be expected to adjust sharply, tightening financial conditions for U.K. households and businesses."
They said that EU banks and insurance companies could also immediately face tougher requirements on their holdings of U.K. debts, which would reduce demand for U.K. assets. However, the committee said markets have "proved able to function effectively through volatile periods" and that the U.K.'s core banking system is strong enough to withstand the economic shock of a disorderly Brexit.
Lawless reported from London.