LUXEMBOURG (CNN) - Brexit talks have hit a wall.
Negotiations between the UK and the European Union broke up on Sunday without a deal, three days before a critical summit of European leaders that was intended to mark significant progress on a Brexit agreement.
The sticking point remains the thorny issue of the Irish border. The European Union wants the UK to agree a "backstop" or fallback position that would ensure an open border between Northern Ireland, which will be outside the EU, and the Republic of Ireland, which will remain an EU member state.
Britain's chief negotiator, Dominic Raab, made an unexpected visit to Brussels, Belgium, on Sunday for a meeting with his EU counterpart Michel Barnier, after which it was clear an impasse had been reached. "Despite intense efforts, some key issues are still open, including the backstop," Barnier wrote on Twitter.
UK Prime Minister Theresa May sought to downplay Sunday's talks as another setback, telling members of Parliament on Monday that "real progress" had been made, particularly on the issue of Northern Ireland, and that a Brexit deal was still "achievable."
"First, we have made real progress in recent weeks on both the withdrawal agreement and the political declaration on our future relationship," she said.
"In March we agreed legal text around the implementation periods, citizen rights and the financial settlement. And we've now made good progress on text concerning the majority of the outstanding issues."
The impasse came after signs that a deal was near. A source familiar with the talks told CNN that negotiators were very close to a draft agreement, but that it was killed in London by May.
May confirmed later in Parliament on Monday that proposals concerning the UK-Ireland border were not tenable.
While May tried to downplay the impasse, European Council President Donald Tusk warned a no-deal Brexit was very much a possibility and that negotiations had "proven to be more complicated than some may have expected."
"We should nevertheless remain hopeful and determined, as there is goodwill to continue these talks on both sides. But at the same time, responsible as we are, we must prepare the EU for a no-deal scenario, which is more likely than ever before," Tusk wrote.
EU foreign ministers, meeting in Luxembourg on Monday, should have been scrutinizing the outlines of a deal. Instead, talks are on hold. "I think we are frustrated, but we're still pretty calm about that," said the Irish foreign minister, Simon Coveney, who is also the deputy prime minister. "I think everybody would like to have seen clarity this week on the withdrawal agreement."
Jeremy Hunt, the UK foreign secretary, said he did not know if a deal would be reached this week. "I think this is a difficult period, it was always going to be at a moment like this. But we should remember that a huge amount of progress has been made. There are one or two very difficult outstanding issues. But, I think we can get there, whether we do this week or not, who knows, but I know everyone is trying very hard."
Time is running out to reach a deal before Britain leaves the EU at the end of March 2019. In the event of a failure to reach a deal, the Bank of England has warned that house prices would crash, businesses fret over chaos at the Channel ports and airlines worry that the agreements that keep planes in the air across Europe would fall away.
But for a deal to be concluded, both sides must find a way to avoid the rebuilding of border posts in Northern Ireland. The removal of border infrastructure was a key part of the Good Friday Agreement that brought peace to the province after years of sectarian strife.
The UK has chafed at EU proposals that Northern Ireland remain closely tied to European regulations on goods and services, including customs arrangements, after Britain leaves the bloc. May argues this amounts to splitting the UK into different customs zones, a political nonstarter.
But her counterproposal, that the whole of the UK remain inside the EU's customs union on a time-limited basis, is rejected by Brussels.
All attempts to reconcile these positions have so far failed. May faces pressure not only from within her Conservative Party, but also her allies in Parliament, the Democratic Unionists, or DUP, a right wing Northern Irish party determined to avoid reunification with the Republic. The DUP said it will not accept any deal that results in Northern Ireland being treated differently from the rest of the UK.
According to a report in the UK's Observer newspaper on Sunday, the DUP believes a "no deal" Brexit is the most likely outcome of the impasse.
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