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John Springford and Sam Lowe, of the Centre for European Reform, have proposed that by emulating the Island’s trade relationship with the EU, the UK government could resolve the Irish border issue and secure enough bargaining power to apply tighter immigration controls, which are two key Brexit issues.

“Hopes that Italy could be the third engine of a Franco-German partnership to renew the EU are probably mistaken,” writes Luigi Scazzieri of the Centre for European Reform. “No matter what happens on March 4th, tensions between the new government and the EU are assured.”

According to the influential Centre for European Reform think-tank it is France, Germany and the EU Commission that are opposed to a good deal. ...CER Director Charles Grant said UK officials have noted that “several member-states are uncomfortable with the hard line taken by France, Germany and the Commission”. Meanwhile, bureaucrats in Berlin and Paris fear that they are becoming increasingly isolated due to their tough approach, meaning it will be “harder for France and Germany to get their way” in the second phase.

This Centre for European Reform briefing explains this issue in more detail. Here is an excerpt from the report, written by Sam Lowe."As well as binding the UK to the EU’s single market and customs union, the draft proposal seeks to ensure that the UK continues to apply the bloc’s external tariff rates and performs the same border checks with non-EU countries. This could easily result in a scenario in which UK exporters are no longer able to take advantage of the EU’s existing free trade agreements, but exporters located in countries with EU FTAs [free trade agreements] would continue to benefit from preferential access to the UK market on the same terms as now.

According to Sam Lowe of the Centre for European Reform, one of the goals of EU negotiators is to push May to explain the reality of Brexit to voters. “The second phase of the withdrawal negotiations, for the EU, is about forcing the UK to acknowledge the inherent trade-offs that come with Brexit,” says Lowe. “There is a hope that when and if they do come clean, then there will be a moment where the country goes, ‘Ah. Do we actually want to do this?’ ”

As Charles Grant of the Centre for European Reform tweeted at the weekend: “The chances of UK staying in the CU are growing — and not just because of movement in the CBI and Labour Party. Several cabinet ministers remain keen and one Leaver cabinet minister told me recently that he could live with staying in CU, though that wouldn’t be his preference.”

Sam Lowe, trade expert at the Centre for European Reform think-tank added the idea was one of the few “half-way house models” to have gained serious consideration on the European side. “Not only does it bind the UK to EU’s regulatory model in areas such as product standards and food safety, it also has the added benefit of resolving the Irish border conundrum.