Transition deal offers certainty to firms, citizens - Britain's May

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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.

The UK Brexit Minister David Davis and the European Commission's Michel Barnier staged a press conference this morning (Monday) after a long weekend of negotiations, during which both parties made some concessions.

British and European Union negotiators have made "good progress" in talks, officials said on Monday, ahead of a crucial summit this week where London hopes to finally seal a deal on a post-Brexit transition period.

"Indeed, her problems on Brexit may only just have begun and it may turn out that the insoluble problem of the Northern Ireland border is the issue that finally brings the entire negotiation crashing down". But Dublin insists the Brexit treaty must lock in a "backstop" arrangement in case that future pact does not work.

"Nothing is agreed until everything is agreed", Barnier said.

"The agreement between the EU and UK on a transitional period up until December 2020 is welcome news particularly in relation to continued frictionless trade across UK-EU borders for the transition".

Britain and the European Union have agreed a Brexit transition deal this morningWhat is a transition period?

Despite accepting that a backstop on maintaining a regulatory alignment between Northern Ireland and the Republic of Ireland will be included in the final withdrawal agreement, the United Kingdom has insisted that it has not accepted the current wording proposed by the EU.

One of the biggest unsolved problems is the border between Ireland and Northern Ireland.

On March 29 a year ago, the British government invoked Article 50 of the Treaty on the European Union, beginning the process of UK's exit from the European bloc.

However, Barnier warned: "A decisive step remains a step; we are not at the end of the road and there still remains a lot of work to be done, including on Ireland and Northern Ireland".

He said that negotiators, working day and night recently, had agreed on "a large part of what would constitute" the draft global legal agreement governing Britain's departure.

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

More troublingly for May's prospects of steering the treaty through parliament, her own party's leader in Scotland, fierce Brexit critic Ruth Davidson, said the transition was a bad deal - for letting the European Union retain power over British fishing grounds.

The agreement must now be agreed upon by the EU's 27 member states at the European Council summit later this week.

However, he described the agreements as a "decisive" moment for efforts to avoid Britain crashing out without a deal.

"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".