United Kingdom and European Union strike Brexit transition deal

The pound surged on the confirmation that Britain would remain as effectively a non-voting European Union member for 21 months until the end of 2020.

Negotiators achieved a landmark deal this morning on transition agreements which will last for almost two years once the United Kingdom leaves Europe next year.

"The European Parliament's Brexit Steering Group welcomes the political agreement, in principle, of a transition period, although we reserve our right of scrutiny".

They called it a "decisive step", but there are still issues to be resolved, including the Northern Ireland border. But Dublin insists the Brexit treaty must lock in a "backstop" arrangement in case that future pact does not work.

The tech sector will however be concerned that there remains no formal agreement around the ongoing ability to deliver the free flow of data during the transition period.

Both sides wanted the transition deal in place so that it could be signed off by European Union leaders at a Brussels summit later this week.

He said they had agreed that the EU's "back stop position" which would see Northern Ireland effectively remain part of the single market if there was no wider agreement, would form part of the legal text of the withdrawal agreement.

"This announcement shows that we can work with our European Union counterparts for the mutual benefit of businesses and residents on both sides of the English Channel and we welcome the progress that is being made".

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Davis agreed with Barnier that Monday's agreement was "decisive" and increased the odds on finding an orderly deal to avoid Europe's second biggest economy simply crashing out of the bloc in just over a year.

"But it remains our intention to achieve a partnership that is so close as to not require specific measures in relation to Northern Ireland and therefore we will be engaged in detail on all the scenarios set out in the joint report", he stated. The UK government has compromised and agreed to remain in that fishing agreement during the transition period.

The remaining 27 European Union countries say Britain must agree to terms on Northern Ireland before it will sign off on the final version of their divorce agreement and advance to trade talks in April.

Carolyn Fairbairn, director general of the Confederation of British Industry (CBI), said: "Agreeing transition is a critical milestone that will provide many hundreds of businesses with the confidence to put their contingency planning on hold and keep investing in the UK".

The EU secured agreement that Britain would offer residence rights to EU citizens who arrive after Brexit but before 2021.

Barnier will this week discuss the agreement with EU foreign ministers, the European Commission and on Friday, EU heads of government, apart from UK Prime MInister Theresa May who is not invited.

"We need to get on with this now", Davis said about the trade talks, adding that he wanted the future deal to be the "most comprehensive and most effective ever".

  • Megan Austin