EU's Tusk says a compromise with Britain is still possible

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Ireland's opposition Fianna Fail party - which is in a confidence and supply arrangement with the governing Fine Gael party - argued that the European Union should have been more positive about the Chequers proposal so as to give May some bargaining space.

"This is about how you can have a fantastic Brexit that sets us up for the next generation and ensures our prosperity", he said.

Amid reports that she had taken a tough line on the negotiations, EU Commission President Jean-Claude Juncker said Thursday that May had been "interesting" and "polite". The UK expects the same. That is why, following months of intensive work and detailed discussions, we proposed a third option for our future economic relationship, based on the frictionless trade in goods.

The pound fell as much as 1.6% against the dollar, the most on a closing basis since June past year. And what is making it so hard for the two sides to agree?

The developments also suggested that Ms.

After EU leaders meeting in Austria on Thursday warned a key element of the Chequers plan would not work, Mr Hunt called them to engage with Britain in a "spirit of politeness and decency" to find an agreed solution.

May has struggled to put forward a complex compromise that can win signatures in Europe and be accepted by rebellious hard-liners in her own government ahead of the March 29 Brexit deadline.

"But she will get up tomorrow morning and she will keep going, and I think the reserves that she has - she never talks about being type 1 diabetic, she never talks about now being over 60 or any of that sort of stuff - but the resilience she is showing under the most extreme pressure, we haven't seen in politics since the financial crash of 2008 and before then for a couple of decades before that".

"I have always said that no agreement is better than a bad agreement".

Earlier on Friday, Mordaunt said that the EU's attitude was increasing support within Britain for an exit from the bloc, even if it meant leaving without a deal.

He told the BBC's Politics Live: "It did not feel like the reciprocation of the statesmanlike approach that she (Mrs May) has taken". "Not with this PM, and not with this parliament". May's strategy of appealing to individual European Union leaders, away from Brussels, had also failed.

He added: "We have been rebuffed on our plans without any coherent explanation as to why".

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"So we now need to hear from the European Union what the real issues are and what their proposals are so we can discuss them".

He said May was "a very stoic, resilient character".

The second issue also relates to the risk of a division on the Irish border, but more specifically over a "backstop" - a position of last resort to protect against a hard border, with checkpoints and guards, on the island of Ireland.

"Theresa May's Brexit negotiating strategy has been a disaster", opposition Labour leader Jeremy Corbyn said.

And she told ministers: "Now is the time to hold our nerve".

More than half the Cabinet are reportedly in favor of a similar deal that would be modeled closely on the free trade agreement Canada operates with the EU.

Pro-Brexit members of May's party on Friday had welcomed her defiant tone, but her Chequers proposal has many domestic critics, too.

At the same time he said they were continue to prepare for a no-deal break with the publication on Monday of a third tranche of "technical" papers on the preparations taking place across various sectors.

She said: "The Prime Minister's statement was awful".

May's "Chequers plan" - named for the prime minister's country retreat where it was hammered out in July - aims to keep the U.K.in the European Union single market for goods but not services, in order to ensure free trade with the bloc and an open border between the U.K.'s Northern Ireland and European Union member Ireland.

The first option would involve the United Kingdom staying in EEA and having customs union with the EU, adding: "In plain English we would still have to abide by all the EU rules".

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