LONDON (Bloomberg) — British Prime Minister Theresa May struck back at the European Union for bluntly dismissing her Brexit plan with a speech designed to shore up her increasingly precarious position at home.
May told EU leaders that she wouldn’t back down and demanded they show her country “respect” in talks. Rather than giving her a boost, a summit of EU leaders failed to mark any progress, particularly on the sticky issue of what do to about the Irish border. Instead, it led to humiliating newspaper headlines in Britain on Friday as May was told to come up with fresh ideas.
“The EU should be clear: I will not overturn the result of the referendum, nor will I break up my country,” May said in the short speech at Downing Street. “We need serious engagement on resolving the two big problems in the negotiations. We stand ready.”
With a little over six months to go before the U.K. is due to leave the EU, May was cut adrift at the two-day powwow in the Austrian city of Salzburg. Friday’s statement was designed to repair her reputation among the hard-line Brexit supporters in her own Conservatives before she faces them at the party’s conference at the end of this month.
“May is playing for the domestic audience, which she continues to do in her speech today,” said Fabian Zuleeg, chief executive of the European Policy Centre, a think tank in Brussels. “Toward November-December, the U.K.’s real concessions will need to come, which she can only get through the Commons if the country is looking down the abyss to no deal.”
The pound fell as much as 1.6 percent against the dollar, the most on a closing basis since June last year, even though May also revealed new details of a possible offer on the Irish border to resolve the impasse. EU officials dismissed the speech as posturing and vowed to persevere toward a deal.
The meeting in Austria was supposed to bolster May’s reputation. Instead, leaders told her to re-work her plans, and set her a deadline of next month to come back with something else. Stepping up the rhetoric on Friday, the prime minster hit out at EU leaders for flatly rejecting her plan for a future relationship with the bloc after Britain leaves in March next year.
“At this late stage in the negotiations, it’s not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals,” she said.
Despite May’s tougher talk, she said she’d be willing to make a compromise on the Irish border, the U.K.’s only land frontier with the EU.
The prime minister will put forward new plans for a so-called backstop guarantee to ensure no police and customs checks are required, hinting she’s willing to allow Northern Ireland to develop its own rules that stay close to those of the EU.
But Northern Ireland’s Democratic Unionist Party, which props up May’s minority Conservative government in London, said it would veto such proposals if they came before the Northern Ireland Assembly, the devolved legislature for the region.
An EU official also said that the proposal was unlikely to go far enough to win support from the bloc, which rejects her proposal to keep Northern Ireland in the same customs territory as the rest of Britain.
Senior bureaucrats privately say they still expect progress at the October EU Council summit, the deadline for the two sides to agree a deal. This moment was always going to come, the EU official said, and it will probably get worse before it gets better.
In a statement late Friday, EU President Donald Tusk said the British government had known of the bloc’s objections to May’s proposal for weeks — a direct rebuttal of her suggestion it hadn’t explained its position. Even so, the EU had treated it as a “step in the right direction,” he said.
“While understanding the logic of the negotiations, I remain convinced that a compromise, good for all, is still possible,” he said.