Brexit negotiators are cautiously optimistic they will be able to sign off on progress at a summit this month, opening up talks on transition and trade with the UK early next year.
But discord over the Irish border and the role of the European Court of Justice still looms large, threatening to undo a tentative understanding on money.
National Brexit attachés met the Commission on Friday afternoon for restricted talks, ahead of a crunch meeting between UK Prime minister Theresa May and Commission president Jean-Claude Juncker on Monday.
‘Facture’ de sortie
Indications that Mrs May will use the meeting to table a more generous financial offer have buoyed EU diplomats, but they are nervous before seeing the details.
“The tricky part is to get something written down,” said one source close to the talks.
EU officials expect May to agree to pay not only the remainder of the current budget, but also honour past and future financial commitments - including the budget overhang (or reste à liquider, covering things like planned infrastructure projects), pensions, bailout loans and contingent liabilities (such as future losses on those bailout loans).
EU and UK negotiators are in constant contact to try to lock down a deal, meeting late into the evening on Thursday and continuing talks on Friday and into the weekend.
But while May has seen off opposition from within her cabinet and the Tory party on money, she is under renewed pressure from the Democratic Unionist Party on Northern Ireland.
Ireland
The 10 DUP MPs propping up her government have threatened to withdraw their support if she signs up to a deal on the Irish border that they don’t like.
Negotiators are now haggling over language that will appease both the DUP and Dublin, which fears a new border could undo the fragile peace in Northern Ireland secured by the 1998 Good Friday Agreement.
The UK says an open border can be guaranteed via a future trade deal with the EU, using technology and customs pre-clearance for trusted and small traders.
But Irish foreign minister and newly appointed deputy prime minister Simon Coveney told BBC Radio 4 that it would be a “leap into the dark” to brush the issue aside now, or try to solve it with technology.
Ireland wants a written pledge from the UK that EU standards on things like food, health and energy will continue to apply in Northern Ireland post-Brexit - the principle of “no regulatory divergence”, in EU jargon.
This, officials say, is the only way to minimise veterinary checks, goods inspections and avoid customs queues, moving any necessary controls to ports and airports in the UK and Ireland.
But the DUP says it will pull its support for Theresa May’s government if she agrees a special deal for Northern Ireland puts up “barriers, real or perceived” with Great Britain.
European Council president Donald Tusk, who will chair the December summit, was travelling to Dublin later on Friday for talks with Taoiseach Leo Varadkar to try to overcome the impasse (see other news).
He and the rest of the EU are fully behind Ireland, officials say. EU countries also have their own skin in the game, fearing an open border could become a back door into the bloc for cheap or counterfeit goods.
Legally, it is possible to devolve vast powers to Belfast, including on agriculture, customs and trade. The problem is now how to sell that “politically”, officials say, so it doesn’t look to the DUP as if a united Ireland is on the cards.
Scotland, which voted to remain in the EU, is also watching a deal on Northern Ireland, making British unionists nervous.
And as Charles Grant of the Centre for European Reform put it in a briefing this week, even if a linguistic fudge is found on Ireland, it merely serves to “postpone the difficult question” of what that means in practice.
Citizens
It’s not the only difficult question plaguing negotiators.
A few weeks ago it seemed as if a deal on citizens’ rights was close, but diplomats say the UK has hardened its red line on the European Court of Justice.
At issue is whether existing and new EU laws will have direct effect in the UK post-Brexit, and whether British judges will be bound to refer certain cases to the European court.
On the EU side, diplomats don’t want to agree a deal on citizens’ rights that could limit the court’s wider role in the divorce agreement or in policing EU social, climate or tax standards under a future trade accord.
Diplomats also draw a direct line back to Northern Ireland and the “regulatory divergence” problem.
With so many moving parts to slot into place, negotiators are right to be cautious. (Sarah Collins)