Thread by @BBCkatyaadler

So can a deal be reached between the EU and UK by Sunday, despite the pervading mood of gloom plus a sense – in public at least – that both sides are digging in their heels? It’s difficult but possible #Brexit /1

Today the European Commission chief hit back at the EU-is-in-denial-about-UK-sovereignty claim.Yes, she said, EU was insisting on what it views as ‘fair competition’ rules in exchange for giving the UK preferential access to the single market (tariff +quota free) but she added/2

that UK would remain free – “sovereign, if you wish” were the words she used – to decide what it wanted to do. If UK diverged the EU "would simply adapt conditions for access to our market. It would be the decision of the UK and would apply vice versa,” she said /3

Is this a change in the EU position? I'd argue no. The EU has gradually shifted focus as it has become increasingly aware that post-Brexit UK will want to make up its own rules and regulations for business; deciding for itself which industries it wants to invest in and promote /4

Despite this, EU would rather have a trade + security deal with UK than not. So Brussels has been pondering how it can live with UK’s sovereign right to diverge, protect single market and still have a deal. Answer: focus more on governance, not just level playing field /5

ie How EU (or UK) could take action to protect their businesses if the either side diverges from the deal. So far, so sensible, you might think. But surprise, surprise, it’s far from being that straight-forward /6

On EU side, Brussels doesn’t want to have to wait for some independent body/arbitration panel to judge whether has the right to retaliate if it believes there is ‘unfair competition’ afoot. It worries a legal process like that could take too long And in meantime, EU businesses /7

could flounder or go under completely. EU leaders worry how they could justify that to their voters. The words “level playing field” or “competition regulations” may sound bewilderingly abstract but, Danish prime minister pointed out yesterday, that each EU leader /8

is thinking about protecting jobs/ businesses in their country – be it Denmark, Germany, France or the Netherlands, when it comes to this deal with the UK. So, EU is pushing to be able to retaliate even before a judgement on unfair competition has been reached./9

Something that the UK clearly says it cannot accept.Can this key disagreement be resolved? Maybe. Michel Barnier, the EU’s chief negotiator, is described by his team as being in a ‘determined, positive mood’. The UK says it’s willing to go the extra mile../10

You can dismiss all this as a PR exercise for public consumption, but the fact that negotiations will continue over the weekend mean neither side has stopped trying.
The problem facing all of us outside the negotiating room, is that there are leaks and assertion a-plenty /11

being made on both sides BUT in the absence of the publication of texts, the only ones who know for sure what’s going on, are the men and women currently sitting opposite each other in closed rooms in Brussels /12

Sunday will be here before we know it. The PM and European Commission Pres say that’s when ‘a decision will be made’. But based on all the other false dawns in these talks, be warned: Sunday’s decision could be ‘deal, ‘no deal’ or ‘let’s keep talking, a little while longer’ /13