Brexit talks stall over how to handle Irish border

Britain and the European Union were close to an agreement over their Brexit divorce on Monday, until talks fell apart over the issue of the Irish border.

Ireland, which will remain in the EU, wants an open border with Northern Ireland, the same arrangement it has had since the 1998 Good Friday agreement that ended the decades of political violence in the north known as "the Troubles."

British Prime Minister Theresa May had offered a compromise she believed would make that happen — allowing Northern Ireland to remain in the EU customs union and continue to follow EU regulations.

But the Democratic Unionist Party said later Monday it "will not accept" the deal. At an emergency news conference in Belfast, DUP Leader Arlene Foster said she would not accept any move "which separates Northern Ireland economically or politically from the rest of the United Kingdom."

Pressure for a deal

The DUP has been supporting May's minority government in Parliament. It is concerned about how competitive Northern Ireland can remain if it is under a different set of regulations than the rest of the U.K.

May met Monday with both EU Commission President Jean-Claude Juncker and EU Council President Donald Tusk in Brussels, hoping to reach a settlement that would allow Brexit talks to move to the next stage, which would include talks on any potential trade deal.

The EU had imposed a Monday deadline to get a deal on a financial settlement, the rights of one another's citizens and Ireland's border.

"Despite our best efforts and significant progress… it was not possible to reach a complete agreement today," Juncker said after the talks broke down. "This is not a failure; this is the start of the very last round."

The EU chief said he still expected the divorce talks to make sufficient progress to move forward after next week's EU summit.

Business wants to move on to trade talks

U.K. businesses are keen to see talks move into the next round, so companies will know the terms of trade with their closest neighbours.

Irish businesses are equally keen for a border deal, as the economies of Ireland and Northern Ireland have become increasingly integrated in the past 19 years. The EU's customs union allows goods to move across the border tariff free.

At present, the 500-kilometre border is essentially invisible. The almost 300 crossing points have no customs posts or border infrastructure, and thousands of people live on one side and work, shop or go to school on the other.

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Irish Prime Minister Leo Varadkar had been anticipating a deal, after EU chiefs told him the U.K. "had agreed a text on the border that met our terms."

Varadkar says he is "surprised and disappointed that the British government appears not to be in a position to conclude what was agreed today."