LONDON: The UK and the European Union struck a deal to unlock divorce negotiations, opening the way for talks on what businesses are keenest to nail down -- the nature of the post-Brexit future.
The European Commission said in a statement that it recommended to EU leaders this week "to conclude that sufficient progress" had been made to move talks along to next stage. The pound rose.
Prime Minister Theresa May travelled Friday morning with an offer: a financial settlement, an agreement on Europeans living in the UK and a solution for keeping open the border that divides the island of Ireland after the split.
The last turned out to be the thorniest, requiring delicate four-way talks, as the Northern Irish party that holds the balance of power in London wielded a powerful veto until the last minute. Breaking the gridlock took months of work and a series of missed deadlines.
By accepting most of the EU's demands, the UK has now won the prize it has been seeking since March -- the right to start discussing relations between the two when Britain parts ways with the bloc after 40 years.
Tory divisions
But it doesn't all end in March 2019, when the UK is slated to depart. A trade deal may take years to formulate and allowing companies and even people to adapt to the new reality will take time. That's why the two-year transition that May seeks is key -- businesses want to know how long they have to plan for the future, whether that means relocation or continued investments.
Mrs May's Conservative administration is fiercely divided over Brexit -- her Cabinet has yet to decide what kind of trading arrangements it wants from Europe.
The second phase will be even more delicate and important than the first -- German Chancellor Angela Merkel has said it will be far more complex than the divorce proceedings of the last eight months.
Britons will also be watching to see if talks live up to what was promised: they were told that Brexit would mean free trade deals with Europe and the rest of the world, controls on European immigration and the repatriation of regulation.
Better than Canada
Mrs May has said she wants a deep and special partnership and a better deal than the free-trade agreement that Canada secured from the EU. But ministers will have to decide what they are willing to sacrifice in order to get what they want and the answer will vary from one faction to another within government and within the Tory Party.
The EU has already started mapping out what it intends to put on the table -- a deal along the lines of the one it offered Canada. That deal was the best in its class but still far short of what the UK currently enjoys as a full member of the single market and customs union.
Divisions may also emerge between EU members in the second phase of negotiations as each country's interests differ.
Mrs May has got the deal that she needed -- and the agreement that businesses were clamouring for. Amid off-and-on threats to oust her, failure to move talks along could have cost Mrs May her job, and brought more instability. It remains to be seen how pro-Brexit Conservatives respond to her concessions.
Irish problem
So far the response to the divorce bill has been muted, but lawmakers have objected to the role given to the European Court of Justice in the UK after Brexit. Foreign Secretary Boris Johnson -- a leading Brexit campaigner -- voiced concerns to May earlier this week when it looked like she was aiming for to preserve EU rules after the divorce.
Also, no one should expect the Irish problem -- whose roots go back centuries -- to go away. The wording of the Irish text leaves room for the border issue to continue rearing its head in the second phase of talks.
The Republic of Ireland wants no border on the island, the UK wants to leave the single market that makes the almost invisible border possible, and the Democratic Unionist Party that props up Mrs May in London is adamant that any efforts to prevent a border on the island don't create the need for a boundary between Northern Ireland and mainland Britain.