Britain and European Union agree on a draft close post-Brexit relationship

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Meanwhile, the European Council President Donald Tusk confirmed that a Draft Political Declaration on the Future Relationship between EU and United Kingdom has been agreed at agreed at negotiators' level and agreed in principle at the political level, subject to the endorsement of the Leaders.

Brussels/London - Britain and the EU have agreed a draft text setting out a close post-Brexit economic relationship, paving the way for a summit of EU leaders to endorse the deal, European Council president Donald Tusk said on Thursday.

"If this is not resolved by Sunday, Spain unfortunately.will have to vote no, and exercise its veto because this is a question that affects the essence of our country", Prime Minister Pedro Sanchez told a joint news conference with his Portuguese counterpart Antonio Costa in the central Spanish city of Valladolid.

A small peninsula on Spain's southern coast and a British territory since 1713, Gibraltar is a major point of contention in Anglo-Spanish relations.

THE SPANISH have threatened to sink threatened to SINK Theresa May's widely panned Brexit deal over the issue of Gibraltar.

The two sides reiterated that they want to replace a provisional agreement preventing the return of extensive border checks on the island of Ireland with a permanent solution.

The UK and European Union have already reached a draft withdrawal agreement on how the UK would leave the European Union - a deal that sparked multiple resignations from May's government last week and moves from within her own party to topple her from the leadership.

Spain's EU Affairs State Secretary, Luis Marco Aguiriano, said there was still time to "legally clarify" the agreement before Sunday.

The announcement cleared the way for a the summit and followed a meeting in Brussels on Wednesday between the Prime Minister and European Commission president Jean-Claude Juncker.

British Prime Minister Theresa May told reporters in London: "The British people want this to be settled, they want a good deal that sets us on course for a brighter future".

In an update of the withdrawal agreement, both sides have agreed that the post-Brexit transition period may be extended from its current end date of December 31, 2020 "for up to one or two years".

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An EU summit is planned for Sunday, but it remains unclear whether it will go ahead.

She will also host Austrian Chancellor Sebastian Kurz on Thursday.

Merkel said: "I can tell you that I will do everything so that we get an agreement - a disorderly withdrawal is the worst possible way for the economy but also for the mental situation of our future relationship".

"All of them were created to send a message to the Government: "Look, we have got an agreement with you but you have got to keep your side of the bargain otherwise we don't feel obliged to keep ours".

A minister who opposed Brexit and who returned to Mrs May's cabinet in a reshuffle triggered by the resignations, tried to rule out this economically disruptive scenario.

May is facing widespread opposition in the British Parliament over the divorce agreement, which was agreed last week.

European Union chiefs backed down on the Irish border when they admitted technology could be used to solve the issue of customs controls at the border between Ireland and Northern Ireland as part of a future trade deal between the United Kingdom and EU.

"This is the right deal for the UK".

She said the alternative to the agreement was either "more uncertainty, more division or it could risk no Brexit at all". "That deal is within our grasp and I am determined to deliver it".

She later told the House of Commons the deal would "create a new free trade area with the European Union, with no tariffs, fees, charges or quantitative restrictions".

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