Brussels is preparing to climbdown on one of its Brexit red lines and concede to UK demands to keep trade links without free movement, it was today reported.
The EU is set to say that it will allow Britain to stay in the single market for goods while still being able to bring in border controls.
Theresa May has been on a charm offensive to desperately try to drum up support for her Chequers Brexit plan amid fears that the UK could crash out of the bloc without a deal next March.
But Brussels is said to be demanding its own concessions in return from the UK which could bind the UK to EU red tape and hamper the country’s ability to do free trade deals.
They want the Prime Minister to pledge that the country will copy all new EU environmental, social and customs rules, The Times reports.
European leaders are expected to bring the proposal to the table when the heads of member states meet in Salzburg in Austria next month.
The move is a radical departure from the public proclamations of the EU’s chief Brexit negotiator Michel Barnier.
He has repeatedly asserted the UK cannot stay in any part of the single market without accepting free movement as that would be ‘cherry picking’.
Mrs May has been on a charm offensive with EU leaders urging them to back her Chequers proposal.
Under the plan the UK will agree to stick to EU rules on goods but fully quit the trading bloc for services – by far the country’s biggest sector.
The PM says this compromise model will protect manufacturers and jobs which rely on goods and components flowing over the EU border seamlessly.
Many Brexiteers are furious at the plan amid fears it wil scupper the UK’s chances of signin free trade deals with other countries and will leavce the UK half in and half out of Brussels.
It triggered the resignations of David Davis and Boris Johnson and sparked fury among Tory activists up and down the country.
The proposal being drawn up in Europe is known as the Jersey model – where a country is outside the bloc for all matters except goods, similar to the Chequers plan.
An EU source told the paper: ‘If May came with the Jersey model there would be a serious discussion among leaders for the first time.
But EU leaders are said to be insisting that if the UK goes for this they must fully adopt the jersey model.
This means the UK would have to agree to adopt all future EU environmental and social protections.
And it would probably also mean that Mrs May would have to alter her customs proposals.
This could seriously undermine the ability of the UK to strike free trade deals globally as they could not include manufactured goods or agricultural products.
This is likely to trigger a furious backlash from Brexiteers who will warn there is little point in quitting the EU if the UK does not have its own independent trading policy.
Under Mrs May’s Brexit plan, the UK will have a common rule book with the EU which would allow single market access for goods.
But it leaves the UK with the room to split away from Brussels rules on the environment and social legislation.
It promises to ensure the UK sticks to existing levels of environmental and social protections, but gives the country the power to take decisions far more quickly than the Brussels machine.
The EU’s member states are worried that Britain will use this power to diverge on environmental laws – giving the country competitive edge.
And they are determined to keep the country tightly bound to its rules and red tape – despite Brexit.