Britain and the European Union made a significant step forward Friday in Brexit talks, officials said, after a flurry of overnight diplomacy by phone bridged differences over the Irish border.
"I believe that we have now made the breakthrough that we needed," European Commission President Jean-Claude Juncker told reporters during a joint news conference with British Prime Minister Theresa May.
But the agreement doesn't give details of how the thorny border issue will be solved, noting that much depends on the outcome of trade talks between Britain and the EU. Its crucial passages promise that whatever happens, the U.K. will maintain "full regulatory alignment" with the bloc on issues affecting Ireland.
Exactly what that means will be fought over by politicians and negotiators in the months to come.
Juncker said that he would recommend to European Union leaders that "sufficient progress has been achieved" on the terms of the divorce to starting talking about issues like future relations and trade.
EU leaders meet in Brussels on Dec. 14 and are likely to endorse the assessment that enough progress has been made on the terms of Britain's financial settlement, the status of Irish borders and the rights of citizens hit by Brexit.
"I am hopeful, sure, confident, sure, that they will share our appraisal and allow us to move on the next phase of the negotiations," Juncker said.
May said: "I very much welcome the prospect of moving ahead to the next phase, to talk about trade and security and to discuss the positive and ambitious future relationship that is in all of our interests,"
"I hope and expect we will be able to get the endorsement of the 27," she said, referring to the other EU countries.
Juncker repeated that he didn't want Britain to leave the EU — the first time a member country has ever done so — saying "I will always be sad about this development but now we must start looking for the future."
Britain leaves the EU on March 29, 2019, but negotiations must be wrapped up within a year to leave time for parliaments to endorse any deal.
Business leaders warn further delays will hurt companies as they plan for the future.
Existing rules allow people and goods to pass freely between the Republic of Ireland and Northern Ireland with no border checks. Ireland wants to preserve the current arrangement, which has eased tensions along the border. May is struggling to balance those demands against the concerns of Northern Ireland's Democratic Unionist Party, which she relies on to support her government in Parliament.
May said that Northern Ireland has "a set of unique circumstances" because it has the U.K.'s only land border with an EU country. The border issue has been threatening to derail the divorce talks.
Earlier this week, the DUP scuttled a deal between the U.K and the bloc, prompting the frantic diplomacy.
May said Friday that the agreement would maintain an open border while preserving the constitutional and economic integrity of the U.K.
DUP leader Arlene Foster appeared satisfied Friday, saying that the agreement gave "very clear confirmation that the entirety of the United Kingdom is leaving the European Union."
May also met with European Council President Donald Tusk, who will chair next Thursday's summit, and Tusk said the EU and London must now start negotiating a transition period to ease Britain's way out of the bloc during a time of legal uncertainty after in 2019.
Tusk noted that Britain has asked for a two-year bridging period, he laid out conditions for that to happen.
"I propose that during this period the U.K. will respect the whole of EU law, including new law, it will respect budget commitments, it will respect judicial oversight and of course all related obligations," he told reporters.
Tusk also said he has sent guidelines to EU leaders on how he thinks phase two of the Brexit talks should be handled.
Meanwhile, British business groups were expressing relief that Brexit talks finally look set to start discussing the future shape of trade and economic relations.
Stephen Martin, who heads U.K. business group the Institute of Directors, said "it went right down to the wire, but businesses will be breathing a huge sigh of relief."
Adam Marshall, director-general of the British Chambers of Commerce, said that "after the noise and political brinksmanship of recent days, news of a breakthrough in the negotiations will be warmly welcomed by companies across the U.K."