EU warns of 5G cybersecurity risks, stops short of singling out China

By Foo Yun Chee

BRUSSELS (Reuters) – The European Union warned on Wednesday of the risk of increased cyber attacks by state-backed entities but refrained from singling out China and its telecoms equipment market leader Huawei Technologies as threats.

The comments came in a report prepared by EU member states on cybersecurity risks to next-generation 5G mobile networks seen as crucial to the bloc’s competitiveness in an increasingly networked world.

The authors chose to ignore calls by the United States to ban Huawei’s equipment, drawing a welcome from the Shenzen-based company after it faced U.S. accusations that its gear could be used by China for spying.

“Among the various potential actors, non-EU states or state-backed are considered as the most serious ones and the most likely to target 5G networks,” the European Commission and Finland, which currently holds the rotating EU presidency, said in a joint statement.

“In this context of increased exposure to attacks facilitated by suppliers, the risk profile of individual suppliers will become particularly important, including the likelihood of the supplier being subject to interference from a non-EU country,” they said.

Huawei, which competes with Finland’s Nokia and Sweden’s Ericsson, said it stood ready to work with its European partners on 5G network security. It has always denied its equipment can be used for spying.

“This exercise is an important step toward developing a common approach to cybersecurity and delivering safe networks for the 5G era,” a Huawei spokesman said.

“We are pleased to note that the EU delivered on its commitment to take an evidence-based approach, thoroughly analyzing risks rather than targeting specific countries or actors.”

Tom Ridge, a former U.S. secretary of homeland security, took a different view of the report. He said Huawei’s close ties to the Chinese government meant it would have to comply with legislation requiring it to assist with intelligence gathering.

“If countries needed more reason to implement stricter security measures to protect 5G networks, this comprehensive risk assessment is it,” said Ridge, a member of the advisory board of Global Cyber Policy Watch.

Fifth-generation networks will hook up billions of devices, sensors and cameras in ‘smart’ cities, homes and offices. With that ubiquity, security becomes an even more pressing need than in existing networks.

“5G security requires that networks are built leveraging the most advanced security features, selecting vendors that are trustworthy and transparent,” a Nokia spokesperson said, adding that the company was the only global vendor capable of providing all the building blocks for secure 5G networks.

EU members have differed on how to treat Huawei, with Britain, a close U.S. ally, leaning toward excluding it from critical parts of networks. Germany is meanwhile creating a level playing field in which all 5G vendors should prove they are trustworthy.

OVER-DEPENDENCE

The report warned against over-dependence on one telecoms equipment supplier.

“A major dependency on a single supplier increases the exposure to a potential supply interruption, resulting for instance from a commercial failure, and its consequences,” it said.

European network operators, including Germany’s Deutsche Telekom typically have multi-vendor strategies that they say reduce the security risks that might arise from relying too heavily on a single provider.

“The Commission’s 5G assessment recognizes security isn’t just a supplier issue,” said Alex Sinclair, chief technology officer of the GSMA, a global mobile-industry trade group.

“We all have a role to play – from manufacturers to operators to consumers – and we are taking responsibility for our part in the security chain seriously.”

The EU will now seek to come up with a so-called toolbox of measures by the end of the year to address cyber security risks at national and bloc-wide level.

The European Agency for Cybersecurity is also finalizing a map of specific threats related to 5G networks.

(Additional reporting by Douglas Busvine in Berlin and Anne Kauranen in Helsinki; Editing by Kirsten Donovan and Elaine Hardcastle)

UK PM Johnson makes final Brexit offer to cool EU reception

By Elizabeth Piper, William James and Kylie MacLellan

MANCHESTER, England (Reuters) – Prime Minister Boris Johnson made a final Brexit offer to the European Union on Wednesday and said that unless the bloc compromised, Britain would leave without a deal at the end of this month.

In what supporters cast as a moment of truth after more than three years of crisis, Johnson stuck to his hard line on Brexit, giving some of the first, albeit vague, details of what he described as “constructive and reasonable proposals”.

With the Oct. 31 Brexit deadline moving closer, Johnson’s aides cast the proposals to be delivered to Brussels as London’s final gambit to try to break the deadlock – principally over arrangements for the Irish border – and find a path to a smooth departure from the EU.

“We are coming out of the EU on October 31, come what may,” Johnson told party members, after expressing “love” for Europe in a speech that focused mostly on domestic issues such as health, the economy and crime.

“We are tabling what I believe are constructive and reasonable proposals which provide a compromise for both sides,” Johnson said. “Let us be in no doubt that the alternative is no deal.”

Many diplomats fear the United Kingdom is heading towards a no-deal or another delay as they say the British proposals are not enough to get an agreement by Oct. 31. Johnson said further delay was “pointless and expensive”.

The initial reaction from other European capitals was cool. Berlin and Paris said they were awaiting details.

EU diplomats and officials in Brussels were less polite with one calling the reported proposals “fundamentally flawed”.

“If it’s take it or leave it, we better close the book and start talking about the modalities of an extension,” a senior EU official told Reuters.

“Essentially it is a non-runner,” said another EU diplomat.

NO DEAL?

Quitting the EU is Britain’s most significant geopolitical move since World War Two. It is, though, still uncertain if it will leave with a deal or without one – or even not leave at all.

Deutsche Bank said it saw a 50 percent chance of a no-deal Brexit by the end of the year. This would spook financial markets, send shockwaves through the global economy and divide the West. It could also bring chaos to British ports and disrupt supply lines in goods from food products to car parts.

Despite Johnson’s repeated promises to deliver Brexit on Oct. 31, parliament has passed a law stating that Britain must request a delay if it does not have a deal by Oct. 19. Johnson has repeatedly refused to say how he will get around the law.

A senior British official said: “The government is either going to be negotiating a new deal or working on no deal – nobody will work on delay.”

Ireland, whose 500 km (300 mile) land border with the United Kingdom, will become the frontier of the EU’s single market and customs union, is crucial to any Brexit solution.

The problem is how to prevent Northern Ireland becoming a back door into the EU market without erecting border controls that could undermine the 1998 Good Friday Agreement that ended decades of sectarian violence in Northern Ireland in which more than 3,600 people were killed.

The Withdrawal Agreement that former Prime Minister Theresa May struck last November with the EU says the United Kingdom will remain in a customs union “unless and until” alternative arrangements are found to avoid a hard border.

Johnson said Britain had compromised in putting forward a proposal to try to change that so-called backstop, an insurance policy to ensure there is no return to a hard border.

Giving little detail on his proposals, Johnson said there would be no checks at or near the Irish border. He said London would respect the 1998 peace agreement. He did not explain how.

IRELAND

Britain would “protect the existing regulatory arrangements for farmers and other businesses on both sides of the border” while Northern Ireland would leave the bloc alongside the rest of the United Kingdom, he said.

“By a process of renewable democratic consent by the executive and assembly of Northern Ireland,” Johnson said. “We will go further and protect the existing regulatory arrangements for farmers and other businesses on both sides of the border.”

He said the United Kingdom “whole and entire” would withdraw from the EU, with London keeping control of its own trade policy from the start. Technology could offer a solution, he said, without giving details.

“I hope very much that our friends understand that and compromise in their turn,” said Johnson, who took office in July after May stood down.

With the EU already pouring cold water on some of the reports of his proposal, the likelihood of a no deal appears to be rising – something Johnson’s opponents say they believe is the prime minister’s overriding goal.

John McDonnell, finance policy chief for the opposition Labour Party, described Johnson’s proposals as “a cynical attempt to force through a no-deal Brexit”.

Johnson has repeatedly said he wants a deal.

(Additional reporting by John Chalmers and Gabriela Baczynska in Brussels; Writing by Elizabeth Piper and Guy Faulconbridge; editing by Angus MacSwan)

Brexit ‘inferno’ lays bare a divided United Kingdom

By Guy Faulconbridge and Elizabeth Piper

LONDON (Reuters) – The fury of Britain’s Brexit “inferno” is so intense that it could encourage violence unless politicians tone down their rhetoric, the husband of a lawmaker murdered a week before the 2016 EU referendum said on Thursday.

Parliament reached boiling point on Wednesday when Prime Minister Boris Johnson and his opponents engaged in hours of vitriolic argument over Brexit, with lawmakers hurling allegations of betrayal and abuse of power across the chamber.

Jo Cox, a 41-year-old parliamentarian from the opposition Labour Party, was murdered on June 16, 2016 by Thomas Mair, a loner obsessed with Nazis and extreme right-wing ideology. She was the mother of two young children.

Cox’s husband Brendan said he was shocked by the inflammatory language on display and both sides should ponder the impact of the words they used.

When asked how his late wife might have responded, Cox said: “She would have tried to take a generosity of spirit to it and thought about how at this moment you can step back from this growing inferno of rhetoric.”

“To descend into this bear pit of polarization is dangerous for our country,” he told the BBC. “It creates an atmosphere where violence and attacks are more likely.”

Brexit has illustrated a United Kingdom divided about much more than the European Union and has fueled soul-searching about everything from secession and immigration to capitalism, empire and Britishness itself.

The rage and ferocity of the Brexit debate have shocked allies of a country that has prided itself as a confident – and mostly tolerant – pillar of Western economic and political stability.

Cox was clear that the language across the Brexit schism was troubling and that the United Kingdom needed to come together rather than tear itself apart.

Some on both sides of the debate are now using the politics of contrived outrage to argue their point. Johnson says parliament is betraying the will of the people over Brexit, while opponents cast him a dictator who has ridden roughshod over democracy to take the United Kingdom to the brink of ruin.

Parliamentary speaker John Bercow told lawmakers to stop treating each other as enemies, saying the atmosphere in the House of Commons was the worst he had known since he was elected 22 years ago.

“The culture was toxic,” Bercow said in parliament.

BREXIT SCHISM

Johnson returned to the chamber on Wednesday after the Supreme Court ruled that his decision to suspend parliament earlier this month was unlawful.

He goaded his opponents either to bring down the government or get out of the way to allow him to deliver Brexit. His opponents roared “resign” and some cast him as a cheating dictator who should stand aside after the court ruling.

Johnson provoked anger by repeatedly calling a law that forces him to ask the EU for a Brexit delay unless he can strike a deal as “the Surrender Bill”. Speaking to Conservative lawmakers on Thursday, he defended his use of the term and received support from the party.

Johnson told the 1922 Committee: “It IS a surrender act,” arguing that it hurt Britain’s negotiating stance with the EU. The prime minister added that he took threats to lawmakers very seriously.

But some were still furious over his response on Wednesday to a question about Jo Cox.

Labour’s Paula Sherriff told the House she had received death threats, some of which echoed the prime minister’s own rhetoric. Johnson replied: “I have never heard so much humbug in my life”, sparking uproar.

It was not just politicians who were angry. Johnson’s own sister Rachel described her brother’s words as a “particularly tasteless” way to refer to the memory of a murdered lawmaker.

“Words like collaborationist, traitor, betrayal, my brother using words like surrender, capitulation, as if the people who are standing in the way of the blessed will of the people as defined by 17.4 million votes in 2016 should be hung, drawn, quartered, tarred and feathered,” she told Sky News.

“I think that it highly reprehensible language to use.”

In the 2016 referendum, 17.4 million voters, or 52 percent, backed Brexit while 16.1 million, or 48 percent, voted to remain.

But after more than three years of crisis since then, it remains unclear how, when or even whether the country will leave the bloc it joined in 1973.

Nicholas Soames, grandson of Britain’s World War Two leader Winston Churchill, said the atmosphere in the chamber was the most poisonous he could remember in 37 years in parliament. “I despair, to be frank,” Soames, 71, said.

(Writing by Guy Faulconbridge; editing by Andrew MacAskill, Angus MacSwan and Giles Elgood)

UK faces food, fuel and drug shortages, says contested leaked document

FILE PHOTO: A line of trucks is seen during a trial between disused Manston Airport and the Port of Dover of how road will cope in case of a "no-deal" Brexit, Kent Britain January 7, 2019. REUTERS/Toby Melville/File Photo

By Kate Holton and William James

LONDON (Reuters) – Britain will face shortages of fuel, food and medicine if it leaves the European Union without a transition deal, according to leaked official documents reported by the Sunday Times whose interpretation was immediately contested by ministers.

Setting out a vision of jammed ports, public protests and widespread disruption, the paper said the forecasts compiled by the Cabinet Office set out the most likely aftershocks of a no-deal Brexit rather than the worst-case scenarios.

But Michael Gove, the minister in charge of coordinating “no-deal” preparations, challenged that interpretation, saying the documents did set out a worst-case scenario and that planning had been accelerated in the last three weeks.

The Times said up to 85% of lorries using the main Channel crossings may not be ready for French customs, meaning disruption at ports would potentially last up to three months before the flow of traffic improved.

The government also believes a hard border between the British province of Northern Ireland and the Republic of Ireland, an EU member, will be likely as plans to avoid widespread checks will prove unsustainable, the Times said.

“Compiled this month by the Cabinet Office under the codename Operation Yellowhammer, the dossier offers a rare glimpse into the covert planning being carried out by the government to avert a catastrophic collapse in the nation’s infrastructure,” the Times reported.

Prime Minister Boris Johnson’s office said it did not comment on leaked documents. But Gove said it was an old document that did not reflect current preparedness.

“It is the case, as everyone knows, that if we do have a no-deal exit there will inevitably be some disruption, some bumps in the road. That’s why we want a deal,” Gove told reporters.

“But it is also the case that the UK government is far more prepared now than it was in the past, and it’s also important for people to recognize that what’s being described in these documents… is emphatically a worst-case scenario,” Gove added.

A government source blamed the leak on an unnamed former minister who wanted to influence negotiations with the EU.

“This document is from when ministers were blocking what needed to be done to get ready to leave and the funds were not available,” said the source, who declined to be named. “It has been deliberately leaked by a former minister in an attempt to influence discussions with EU leaders.”

NO TURNING BACK

The United Kingdom is heading toward a constitutional crisis and a showdown with the EU as Johnson has repeatedly vowed to leave the bloc on Oct. 31 without a deal unless it agrees to renegotiate the Brexit divorce.

Yet after more than three years of Brexit dominating EU affairs, the bloc has repeatedly refused to reopen the Withdrawal Agreement.

Brexit minister Stephen Barclay said on Twitter he had signed a piece of legislation which set in stone the repeal of the 1972 European Communities act – the laws which made Britain a member of the organization now known as the EU.

Though his move was largely procedural, in line with previously approved laws, Barclay said in a statement: “This is a clear signal to the people of this country that there is no turning back (from Brexit).”

A group of more than 100 lawmakers wrote to Johnson calling for an emergency recall of parliament to discuss the situation.

“We face a national emergency, and parliament must now be recalled in August and sit permanently until October 31 so that the voices of the people can be heard, and that there can be proper scrutiny of your government,” the letter said.

Johnson will this week tell French President Emmanuel Macron and German Chancellor Angela Merkel that the Westminster parliament cannot stop Brexit and a new deal must be agreed if Britain is to avoid leaving the EU without one.

Merkel said during a panel discussion at the Chancellery: “We are prepared for any outcome, we can say that, even if we do not get an agreement. But at all events, I will make an effort to find solutions – up until the last day of negotiations.”

Johnson is coming under pressure from politicians across the political spectrum to prevent a disorderly departure, with opposition leader Jeremy Corbyn vowing to bring down Johnson’s government to delay Brexit.

It is, however, unclear if lawmakers have the unity or power to use the British parliament to prevent a no-deal departure, likely to be the UK’s most significant foreign policy move since World War Two.

(Editing by Gareth Jones and David Holmes)

From archaeologists to vets, UK widens list of desired immigrants

LONDON (Reuters) – Britain needs a wider range of immigrants to tackle shortages of workers ranging from archaeologists and architects to vets and web developers, government advisors said on Wednesday, just days after figures showed immigration had fallen to a five-year low.

Britain is reviewing its immigration system as it prepares to leave the European Union, which allows almost unrestricted free movement of workers between its 28 member states.

More than 3 million foreigners have moved permanently to Britain since 2009, despite the government’s aim to reduce net migration to 100,000 a year, and this was a top worry for voters at the time of 2016’s referendum to leave the EU.

However, in its first full review of job shortages in five years, the government’s Migration Advisory Committee (MAC) said shortages of workers in Britain’s economy had increased since 2013, as unemployment had fallen to its lowest since 1975.

The body, made up mostly of academic labor market economists, recommended that jobs similar to those done by 9% of workers in Britain should be put on an immigration shortage list, up from less than 1% in 2013.

“The expansion comes mainly from the wider set of health and IT sector jobs included,” the report said.

The MAC’s recommendations are not binding, but the government has generally followed previous suggestions.

Inclusion on the ‘shortage occupation list’ would mean employers no longer needed to prove they were unable to hire a British worker to do the job, and shortage workers would have priority over some other immigrants if quotas applied.

Businesses welcomed the recommendation from the body, which has already urged the government to lift a cap on high-skilled immigrants, but had upset some firms by opposing a new category of post-Brexit visa for low-skilled EU workers.

“Our research shows that three-quarters of firms are currently unable to find the talent they need, and vacancies are being left unfilled,” the British Chambers of Commerce said.

However Migration Watch UK, a body that wants less immigration, called the new job shortage list “astonishing”.

“The MAC seems to have turned 180 degrees from its previous emphasis on encouraging employers to recruit domestically through improved wages, better conditions and boosted training,” Migration Watch’s vice-chairman, Alp Mehmet, said.

Stricter border controls were Britons’ top concern at the time of the 2016 referendum, but this has now fallen to third place, behind funding public healthcare and education, according to recent polling by market research company Kantar.

Nonetheless, some 42% of Britons still want to restrict EU citizens’ future rights to live in Britain after Brexit, while only 33% wanted to preserve them.

(Reporting by David Milliken; editing by Stephen Addison)

Tearful Theresa May resigns, paving way for Brexit confrontation with EU

British Prime Minister Theresa May reacts as she delivers a statement in London, Britain, May 24, 2019. REUTERS/Toby Melville

By Elizabeth Piper, William James and Kylie MacLellan

LONDON (Reuters) – Fighting back tears, Theresa May said on Friday she would quit, setting up a contest that will install a new British prime minister who could pursue a cleaner break with the European Union.

May’s departure deepens the Brexit crisis as a new leader, who should be in place by the end of July, is likely to want a more decisive split, raising the chances of a confrontation with the EU and potentially a snap parliamentary election.

Her voice cracking with emotion, May, who endured crises and humiliation in her failed effort to find a compromise Brexit deal that parliament could ratify, said she would resign on Friday, June 7 with a leadership contest beginning the following week.

“I will shortly leave the job that has been the honor of my life to hold,” May said outside her Downing Street official residence with her husband, Philip, looking on. “The second female prime minister, but certainly not the last.

“I do so with no ill will but with enormous and enduring gratitude to have had the opportunity to serve the country I love,” said the usually reserved May as she fought back tears.

May, once a reluctant supporter of EU membership who won the top job in the turmoil that followed the 2016 Brexit referendum, steps down with her central pledge – to lead the United Kingdom out of the bloc and heal its divisions – unfulfilled.

“It is, and will always remain, a matter of deep regret to me that I have not been able to deliver Brexit,” May said, adding that her successor would have to find a consensus to honor the 2016 referendum result.

Jeremy Corbyn, leader of the main opposition Labour Party, said the new prime minister must hold an election to “let the people decide our country’s future”.

PM BORIS JOHNSON?

May bequeaths a deeply divided country and a political elite that is deadlocked over how, when or whether to leave the EU. The latest deadline for Britain’s departure is Oct. 31.

Most of the leading contenders to succeed May want a tougher divorce deal, although the EU has said it will not renegotiate the Withdrawal Agreement it sealed with Britain in November.

Spain said it now seemed almost impossible to avoid a so-called hard Brexit, or clean break from the EU, and the bloc signaled there would be no change on the agreement despite European Commission President Jean-Claude Juncker learning of May’s resignation “without personal joy”.

Irish Foreign Minister Simon Coveney underlined the bloc’s stance that there would be no better Brexit deal.

“This idea that a new prime minister will be a tougher negotiator and will put it up to the EU and get a much better deal for Britain? That’s not how the EU works,” Coveney told Ireland’s Newstalk radio station.

Sterling swung back and forth on May’s resignation, trading slightly higher on the day, and British government bond yields edged off near-two-year lows struck first thing on Friday. Boris Johnson, the face of the official Brexit campaign in 2016, is the favorite to succeed May and he thanked her for her “stoical service”. Betting markets put a 40% implied probability on Johnson winning the top job.

Others tipped are Dominic Raab, a Brexit supporter and former Brexit secretary, with a 14% implied probability on his chances. Environment Secretary Michael Gove, former House of Commons leader Andrea Leadsom and Foreign Secretary Jeremy Hunt each have a 7% probability, according to betting markets.

Defence Secretary Penny Mordaunt and International Development Secretary Rory Stewart each have a 4% chance of the top job while Home Secretary Sajid Javid has a 3% chance.

For many Conservative lawmakers, speed is of the essence to install a new leader to try to break the Brexit impasse.

The governing party said it would move quickly to try to end the leadership contest before parliament breaks for a summer holiday, a so-called recess which usually falls in late July.

“The fight for the heart and soul of the Conservative Party officially starts now,” said Andrew Bridgen, a pro-Brexit lawmaker. “We need a new PM as soon as possible and who that is will decide the future of our democracy, our country and the Conservative Party.”

(Writing by Guy Faulconbridge; Additional reporting by Kate Holton; Editing by Janet Lawrence)

Britain warns of Iran-U.S. conflict, Pompeo meets Europeans

FILE PHOTO: The Iranian flag flutters in front the International Atomic Energy Agency (IAEA) headquarters in Vienna, Austria March 4, 2019. REUTERS/Leonhard Foeger/File Photo

By Robin Emmott

BRUSSELS (Reuters) – Iran and the United States could trigger a conflict by accident in an already unstable Gulf region, Britain’s foreign minister said on Monday, as U.S. Secretary of State Mike Pompeo held talks in Brussels with the main European powers on the crisis.

President Donald Trump is seeking to isolate Tehran by cutting off its oil exports after pulling out of a 2015 deal aimed at curbing Iran’s nuclear program. Trump has also beefed up the U.S. military presence in the Gulf to pressure Iran.

While the European Union shares some U.S. concerns about Iran, including over its involvement in the Syrian conflict, it still backs the 2015 nuclear deal, saying that it is in Europe’s own security interests.

“We are very worried about a conflict, about the risk of a conflict … of an escalation that is unintended,” Britain’s Jeremy Hunt told reporters in Brussels ahead of the talks with Pompeo.

Britain, Germany and France are signatories to the 2015 deal and their foreign ministers were holding separate meetings in Brussels on Monday with Pompeo, who canceled a planned stopover in Moscow in order to brief the European allies on Washington’s latest moves.

Trump, who wants to force Tehran to agree a broader arms control accord, has sent an aircraft carrier and B-52 bombers to the Gulf in a show of force against what U.S. officials have said is a threat to U.S. troops in the region.

Iran says the strategy amounts to “psychological warfare” and a senior Iranian Revolutionary Guards commander on Sunday said Iran would retaliate to any aggressive U.S. moves.

“TAKING DIFFERENT COURSES”

The U.S. State Department billed Monday’s talks in Brussels as a chance “to discuss recent threatening actions and statements” by Iran.

German Foreign Minister Heiko Maas said he had told Pompeo during their Monday meeting: “We do not want it to come to a military conflict (between the United States and Iran).”

Maas avoided any public criticism of Washington, saying both sides wanted to ensure peace in the Middle East. But he said it was clear that Europe and the United States were “going about it in different ways … taking different courses.”

Before his meeting with Pompeo, France’s Foreign Minister Jean-Yves Le Drian urged Europeans to remain united in support of the nuclear deal, which was signed by the United States, Britain, France, Germany, China and Russia, and which the European Union helped to negotiate.

For Europe, the tensions with the Trump administration mark a deepening split in transatlantic ties that were traditionally marked by close coordination on Middle East policy, despite sharp disagreements over the 2003 Iraq war.

Iranian President Hassan Rouhani warned last week that Tehran could resume enrichment at a higher grade if the European powers, China and Russia did not do more to circumvent punitive U.S. measures on banking and energy to boost trade.

Hunt, who held talks with Maas and Le Drian on the margins of a regular EU meeting in Brussels, expressed concern about the risks of a nuclear arms race in the Middle East if Iran were to acquire such weapons.

“We need to make sure that we don’t end up putting Iran back on the path to re-nuclearization,” Hunt said, calling for “a period of calm so that everyone understands what the other side is thinking”.

EU foreign policy chief Federica Mogherini said the EU would continue to support the nuclear pact because Iran continued to comply with inspections and uranium production limits.

The EU is trying to implement a new channel to allow Iran to sell its oil and circumvent newly-instated U.S. sanctions, but setting it up is proving complex.

Spain’s Foreign Minister Josep Borrell said Madrid was considering joining the special trade channel, known as INSTEX, which so far counts France, Germany and Britain as shareholders and could be operational by the end of June.

(Additional reporting by Francesco Guarascio and Philip Blenkinsop; Editing by Gareth Jones)

EU gives May till October for Brexit, seeking clarity

European Council President Donald Tusk, Luxembourg's Prime Minister Xavier Bettel, Britain's Prime Minister Theresa May, Germany's Chancellor Angela Merkel and Portugal's Prime Minister Antonio Costa look at a tablet ahead of a European Council meeting on Brexit at the Europa Building at the European Parliament in Brussels, Belgium April 10, 2019. Kenzo Tribouillard/Pool via REUTERS

By Elizabeth Piper, Gabriela Baczynska and Philip Blenkinsop

BRUSSELS (Reuters) – European Union leaders gave Britain six more months to leave the bloc, more than Prime Minister Theresa May says she needs but less than many in the bloc wanted, thanks to fierce resistance from France.

The summit deal in Brussels in the early hours of Thursday meant Britain will not crash out on Friday without a treaty to smooth its passage. But it offers little clarity on when, how or even if Brexit will happen, as May struggles to build support in parliament for withdrawal terms agreed with the EU last year.

With German Chancellor Angela Merkel insisting that Britain would not be forced out and that a chaotic no-deal departure must be avoided if at all possible, there was never any real doubt that May would get an extension.

The drama was about its length and conditions.

French President Emmanuel Macron, reprising a role he took last month when May got a first, two-week delay, pushed leaders into hours of debate over dinner as he fought a largely solo campaign to persuade them not to give the British up to another year.

Summit chair Donald Tusk and others argued that obliging May to accept a much longer deadline than the June 30 date she had sought could help swing pro-Brexit hardliners within her own Conservative party behind her deal, fearing a long delay could see the British public turning against a withdrawal altogether.

But Macron, while irritating some peers who saw his stance as Gallic grandstanding, insisted that letting Britain stay in the Union any longer risked undermining the project of European integration that is one of his main policy goals.

The result was a compromise on the date, with a deadline of Oct. 31, for Britain to leave, deal or no deal — on condition that May holds an election on May 23 to return British members to a new European Parliament that convenes in July, and that it pledge not to disrupt key EU decision-making before it leaves.

If May fails to win over lawmakers on the treaty or fails to hold an election, Britain will leave with no deal on June 1.

MAY EYES BREXIT SOON

The prime minister was keen to stress that the extension to Oct. 31 — and several leaders refused to rule out further delays — did not mean she would not deliver Brexit sooner and before, as she promised her rebellious party, she steps down.

“I know that there is huge frustration from many people that I had to request this extension,” she told reporters, as her team prepared for another round of talks on Thursday with the Labour opposition, to whom May turned for help last week.

“But the choices we now face are stark and the timetable is clear. So we must now press on at pace with our efforts to reach consensus on a deal that is in the national interest,” she added, acknowledging the coming weeks would not be easy.

Tusk, a former Polish premier who has long tried to keep a door open for Britons to change their minds and stay, said the delay until Halloween gave time for London to ratify May’s deal, tweak elements of the future EU-UK relationship to Labour’s liking — or give it a chance to “cancel Brexit altogether”.

Merkel, who eased tension at the start of the talks by sharing a joke with May over photographs of them both wearing very similar jackets, stressed a need for calm and order: “We want an orderly exit by Britain,” she said. “And an orderly exit by Britain can be best ensured if we give it some time.”

FRENCH RESISTANCE

Macron defended his resistance to giving Britain nine months or a year more, saying it was for the “common good”. French officials, pointing to threats by some of May’s pro-Brexit potential successors, spoke of the EU facing “blackmail” by a future British government blocking decisions in Brussels.

“It’s true that the majority was more in favor of a very long extension. But it was not logical in my view, and above all, it was neither good for us, nor for the UK,” said Macron.

French pressure also tightened clauses referring to Britain not disrupting EU affairs if it stays in longer and a reference to a June 20-21 EU summit taking stock of the position again.

May addressed the other 27 for an hour at the start of the summit and failed to convince many, notably Macron, that she truly had a new strategy for securing ratification.

Leaders are exasperated with May’s handling of a tortuous and costly divorce that is a distraction from ensuring the bloc can hold its own against global economic challenges.

Across from the summit venue, the EU executive celebrated its part in funding a global project that produced the first picture of a black hole, prompting no shortage of ironic comments on social media about the juxtaposition.

Blogger Eliot Higgins tweeted: “We’re now more certain about what black holes look like than what Brexit looks like.”

(Reporting by Guy Faulconbridge in London, Thomas Escritt in Berlin and Gabriela Baczynska, Jan Strupczewski, Elizabeth Piper, Bart Meijer, Alissa de Carbonnel, Philip Blenkinsop, Robin Emmott, Alastair Macdonald, Francesco Guarascio, Clare Roth, Peter Maushagen, Jean-Baptiste Vey and Michel Rose in Brussels; Writing by Alastair Macdonald; Editing by James Dalgleish and Michael Perry)

Battle rages for Libya’s capital, airport bombed

A Member of Misrata forces, under the protection of Tripoli's forces, prepares himself to go to the front line in Tripoli Libya April 8, 2019. REUTERS/Hani Amara

By Ahmed Elumami and Ayman al-Warfalli

TRIPOLI/BENGHAZI, Libya (Reuters) – A warplane attacked Tripoli’s only functioning airport on Monday as eastern forces advancing on Libya’s capital disregarded global appeals for a truce in the latest of a cycle of warfare since Muammar Gaddafi’s fall in 2011.

The fighting threatens to disrupt oil supplies, fuel migration to Europe and wreck U.N. plans for an election to end rivalries between parallel administrations in east and west.

Casualties are mounting.

The eastern Libyan National Army (LNA) forces of Khalifa Haftar – a former general in Gaddafi’s army – said 19 of its soldiers had died in recent days as they closed in on the internationally recognized government in Tripoli.

A spokesman for the Tripoli-based Health Ministry said fighting in the south of the capital had killed at least 25 people, including fighters and civilians, and wounded 80.

The United Nations said 2,800 people had been displaced by clashes and many more could flee, though some were trapped.

“The United Nations continues to call for a temporary humanitarian truce to allow for the provision of emergency services and the voluntary passage of civilians, including those wounded, from areas of conflict,” it said in a statement.

But that seemed to fall on deaf ears. Matiga airport, in an eastern suburb, said it was bombed and a resident confirmed the attack. No more details were immediately available.

Haftar’s LNA, which backs the eastern administration in Benghazi, took the oil-rich south of Libya earlier this year before advancing fast through largely unpopulated desert regions toward the coastal capital.

Seizing Tripoli, however, is a much bigger challenge for the LNA. It has conducted air strikes on the south of the city as it seeks to advance along a road toward the center from a disused former international airport.

MACHINE GUNS ON PICKUPS

However, the government of Prime Minister Fayez al-Serraj, 59, is seeking to block the LNA with the help of allied armed groups who have rushed to Tripoli from nearby Misrata port in pickup trucks fitted with machine guns.

A Reuters correspondent in the city center could hear gunfire in the distance southwards.

Serraj who comes from a wealthy business family, has run Tripoli since 2016 as part of a U.N.-brokered deal boycotted by Haftar. His Tripoli government has reported 11 deaths in the last few days, without saying on which side.

U.N. envoy Ghassan Salame met Serraj in his office in Tripoli on Monday to discuss “this critical and difficult juncture”, the world body’s Libya mission said.

The violence has jeopardized a U.N. plan for an April 14-16 conference to plan elections and end anarchy that has prevailed since the Western-backed toppling of Gaddafi eight years ago.

The U.N. refugee agency expressed anxiety about thousands caught in cross-fire and detention centers in conflict zones in a “rapidly deteriorating humanitarian situation”.

As well as the United Nations, the European Union, United States and G7 bloc have all urged a ceasefire, a halt to Haftar’s advance and return to negotiations.

Haftar casts himself as a foe of extremism but is viewed by opponents as a new dictator in the mould of Gaddafi, whose four-decade rule saw torture, disappearances and assassinations.

MIGRANTS AND MILITANTS

The LNA says it has 85,000 men, but this includes soldiers paid by the central government that it hopes to inherit. Its elite force, Saiqa (Lightning), numbers some 3,500, while Haftar’s sons also have well-equipped troops, LNA sources say.

Analysts say Haftar has swelled his ranks with Salafist fighters and tribesmen as well as Chadians and Sudanese from over the southern borders, claims dismissed by the LNA.

Since NATO-backed rebels ousted Gaddafi, Libya has been a transit point for hundreds of thousands of migrants trekking across the Sahara in hope of reaching Europe across the sea.

Islamic State staged some high profile attacks in Tripoli last year, but the militant group has largely retreated to the desert of southern Libya since the loss of its former stronghold in Sirte late in 2016.

France, which has close links to Haftar, said it had no prior warning of his push for Tripoli, a diplomatic source said.

France established close relations with Haftar under the Socialist government of Francois Hollande and his defense minister Jean-Yves Le Drian.

When President Emmanuel Macron named Le Drian his foreign minister, Paris doubled down support to Haftar, in close alignment with Egypt and the United Arab Emirates, which see him as a bulwark against Islamists and have supported him militarily, according to U.N. reports.

France’s stance has created tensions with Italy, which has sought a leading role to end the turmoil in its former colony that has played into the hands of militants and smugglers.

(Reporting by Ahmed Elumami and Ayman al-Warfalli; Additional reporting by Hani Amara in Tripoli, Ulf Laessing in Cairo, Tom Miles in Geneva, Robin Emmott in Luxembourg, Marine Pennetier in Paris; Writing by Andrew Cawthorne; Editing by Kevin Liffey and Alison Williams)

With British government, parliament and people divided, a disorderly Brexit looms

Britain's Prime Minister Theresa May attends a Serious Youth Violence Summit in Downing Street, London, Britain April 1, 2019. Adrian Dennis/Pool via REUTERS

By Elizabeth Piper, Kylie MacLellan and Gabriela Baczynska

LONDON/BRUSSELS (Reuters) – The European Union said on Tuesday that Britain could be heading for a potentially disorderly exit in just 10 days time as Prime Minister Theresa May met with ministers to thrash out ways to break the Brexit deadlock.

Nearly three years since the United Kingdom voted to leave the EU in a shock referendum result, May’s exit strategy is up in the air as her government and party are still squabbling over how, when or even if Brexit should happen.

May’s divorce deal has been defeated three times by the lower house of the British parliament, which failed on Monday to find a majority of its own for any alternatives. She is expected to try to put her deal to a fourth vote this week.

The deadlock has already delayed Brexit for at least two weeks beyond the planned departure date to 2200 GMT on April 12.

“Over the last days a no-deal scenario has become more likely, but we can still hope to avoid it,” EU chief Brexit negotiator Michel Barnier said in Brussels.

May chaired several hours of cabinet meetings in Downing Street in a bid to find a way out of the crisis. It was unclear what, if anything, had been agreed.

European Central Bank policymaker Francois Villeroy de Galhau said markets needed to price in the growing risk of a no-deal.

The cacophony of warnings over a disorderly Brexit ratchet up the pressure on British lawmakers as some try to grab control of parliament to prevent a no-deal.

If May cannot get her deal ratified by parliament then she has a choice between leaving without a deal, trying to trigger an election, or asking the EU for a long delay to negotiate a Brexit agreement with a much closer relationship with the bloc.

UP TO BRITAIN

At least half of her Conservative Party wants to leave the EU without a deal, though some lawmakers and ministers are telling her she must keep the United Kingdom firmly within the bloc’s economic orbit.

The defeat of May’s deal after pledging to quit if it was passed has left the weakest British leader in a generation facing a spiraling crisis.

“I hope that we can still find a solution. The British parliament has said itself that it doesn’t want a disorderly Brexit,” German Chancellor Angela Merkel said.

May will set out next steps ahead of an emergency EU summit on April 10, her spokesman said. May remained opposed to another referendum, he added.

In Paris, French President Emmanuel Macron said that if nearly three years after the referendum the United Kingdom was incapable of coming up with a solution, “it would have effectively chosen a no-deal exit on its own”.

Speaking at the Elysee palace alongside Irish Prime Minister Leo Varadkar, Macron said it was for Britain to decide whether the plan involved new elections, a referendum or a customs union.

“It’s up to London to say it, and to say it now,” he said.

With the British electorate, its two major parties and the cabinet are all divided over Brexit, May risks ripping her party apart whichever way she tilts.

BREXIT CHAOS?

Such is the volatility of Brexit news from London that some traders have stepped away from sterling – which has seesawed on Brexit news since the 2016 referendum.

Sterling fell toward $1.30. The EU said a no-deal would disrupt financial markets and have an impact on liquidity.

Auto-maker Ford also sounded the alarm bells, saying it would have to consider what actions to take to protect its business in the event of a no-deal Brexit.

No-deal means there would be no transition so the exit would be abrupt. Britain is a member of the WTO so tariffs and other terms governing its trade with the EU would be set under WTO rules.

A group of lawmakers said on Tuesday they would try to pass a law which would force May to seek a delay Brexit and thus prevent a no-deal exit on April 12.

For now, May’s deal is back in focus, though she must find a way to get around a ban on repeatedly bringing the same matter to a vote in parliament.

(Writing by Guy Faulconbridge; Additional reporting by Jan Strupczewski in Brussels, Andreas Rinke and Michelle Martin in Berlin, William James and Ritvik Carvalho in London and Tom Miles in Geneva, Richard Lough, Michel Rose and John Irish in Paris; editing by Michael Holden and Angus MacSwan)