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Eurocrats are still failing to treat Britain as an independent sovereign nation despite time running out to reach an agreement, No 10 said. Brexit trade negotiations remain deadlocked over fishing rights and state aid rules.
Boris Johnson wants a deal but is “sure that we will prosper” if that proves impossible.
The Prime Minister’s spokesman said: “Significant differences do remain and key elements in the draft texts are not yet agreed.
“What we are working to do is seek solutions that fully respect UK sovereignty.
“Negotiators have been in contact almost every day since October 22 and they are continuing to work intensively to bridge the gaps that remain between us.
“But, although there has been some progress in recent days, there is much work to be done and time is now very short.
“So if we are to make further progress in the coming days, we need to see more realism from the EU on what it means for the UK to be an independent state.”
UK negotiator Lord Frost is in Brussels to continue discussions with counterpart Michel Barnier this week.
Mr Barnier said the EU remains “determined, patient, respectful” in the talks.
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He added: “We want our future cooperation to be open but fair in all areas.”
A series of informal deadlines for reaching an agreement has passed but the transition period legally ends on December 31.
Health Secretary Matt Hancock insisted the UK is ready for a no-deal outcome but said an agreement could be reached if the EU compromised.
He said: “Our red lines haven’t changed and we’re preparing for whatever the outcome is.
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“Of course our preference is to get a deal and that is open to the Europeans if they choose to make the progress that’s needed.”
EU officials had hoped to make a breakthrough in time for a summit of the bloc’s leaders this week but that now looks unlikely.
Any deal would need to be signed off by EU member states, the European Parliament and the UK Parliament.
European officials have concluded it is already “too late” for the EU Parliament to carry out its full ratification and “creative solutions” will be needed to get a deal across the line.
One source familiar with the discussions said MEPs could vote as late as December 28 to rubber-stamp any Brexit trade deal.
The European Commission insisted it would not engage in the “craziness” of deadlines but instead focus on the “quality of this agreement” with Britain.
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