Brexit deal breakthrough: Merkel raises hope of agreement after UK seals pact with Norway

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The German Chancellor said the UK’s latest agreement was an “indicator” that a similar deal can be struck between Brussels and London. Speaking at a news conference in Brussels, the influential leader said: “This agreement with Norway is at least an indicator for being on a constructive path, and I don’t think that’s a bad message at all for us. I think it is rather one that shows that one can find ways to come to an agreement.”

Germany currently holds the EU’s rotating presidency and Mrs Merkel will play a key role in convincing member states to support any agreement reached between Michel Barnier and Lord Frost.

Mrs Merkel will host the EU’s chief Brexit negotiator in Berlin on Monday to discuss the latest steps in the Brexit process.

After the ninth formal round of talks, the German suggested she was still “optimistic” a deal can be reached.

She said: “A lot will be determined by what Britain wants and what Britain does not want. It is up to Britain to decide this freely.

“As long as negotiations are ongoing I remain optimistic, but obviously I cannot tell you that there has been a breakthrough. It will be a crucial phase over the next few days.”

Boris Johnson will hold separate talks with Commission President Ursula von der Leyen to “take stocks” on the latest round of wrangling over a free-trade agreement.

Brussels sources claim British negotiators have shown a willingness to compromise in order to secure a deal.

But EU diplomats say the move will require a decision by the politicians before both sides can make the concessions a reality.

A No10 spokesman said: “The Prime Minister will be speaking to President von der Leyen tomorrow afternoon to take stock of negotiations and discuss the next steps.”

A senior diplomatic source said: “This is a good sign. I hope there will be forthcoming signals on the two main outstanding issues – fish and state aid.”

Another EU source said the five British proposals tabled ahead of this week’s negotiating had created an opening.

The insider said: “The papers did their job. They provided a starting point for talks this week.

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“It’s now good that the top leaders touch base on where we stand and the way forward.”

Mr Barnier, the EU’s chief Brexit negotiator, is understood to be far from convinced that it’s time for both sides to enter the “tunnel. 

The Brussels diplomat is hoping to use time pressure on the British to secure more concessions for the bloc.

An EU source said: “We’ll need more talks to get to the point where we can say the landing zone is in sight.”

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A tenth round of formal negotiations is expected to be announced before both sides enter into the “tunnel” ahead of a crunch summit of European leaders on October 15.

Ahead of the deadline set by the Prime Minister, both sides still have to reach an agreement on access to Britain’s coastal waters for European fishermen and a demand by Brussels for a legally-binding mechanism to control future state subsidies.

British proposals to allow EU vessels a three-year transition to the new post-Brexit regime and a state aid model based on the UK-Japan trade deal was seen as favourable by Brussels.

The atmosphere in the negotiating rooms are said to be “positive” despite outside anger over the Government’s plans to rip up sections of last year’s Brexit divorce deal relating to Northern Ireland.

Yesterday Mrs von der Leyen triggered legal action against the UK over the Internal Market Bill.

But Downing Street is expected to withdraw the controversial elements of the legislation if there is a breakthrough in the talks later this month.

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