Taoiseach Leo Varadkar talking to the media outside the Stormont hotel on Jan. 12.
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Irish premier Leo Varadkar on Thursday said there has yet to be a breakthrough over Northern Ireland’s post-Brexit trade rules, but expressed hopes that an agreement is within reach.
“We’re not there yet. I am hopeful that we will get there,” Taoiseach (Irish Prime Minister) Varadkar told CNBC’s Steve Sedgwick at the World Economic Forum in Davos, Switzerland.
“I think certainly Prime Minister [Rishi] Sunak and the British government seem to be very serious about coming to an agreement and settling this issue. And I think there is increased flexibility from the European Union side, which includes Ireland, around coming to an agreement.”
Varadkar recognized other issues that require attention, “The protocol is important, but there is war in Ukraine, there is a global recession underway, an energy crisis, inflation and Europe and the U.K. need to work together.”
He added that “any kind of barrier to further cooperation that we can remove is in the interest, I think, of everyone.”
His comments come shortly after Ireland’s Finance Minister Michael McGrath spoke of growing optimism and “welcome signs of progress” surrounding negotiations between the U.K. and European Union.
“The talks are ongoing and there does appear to be a better mood overall, more positive discussions underway between the EU and the U.K.,” McGrath told CNBC’s Joumanna Bercetche on Wednesday.
“And I think it is in everyone’s interests that a negotiated agreement would be reached soon, so that we can have free-flowing trade across the Irish Sea, between Britain and Ireland — North and South — and we protect the Good Friday Agreement and peace,” he said.
Britain and the European Union on Monday agreed to work in a “constructive and collaborative spirit” to resolve a post-Brexit trade dispute over Northern Ireland.
“The two sides discussed the range of existing challenges over the last two years and the need to find solutions together,” European Commission Vice-President Maros Sefcovic and British Foreign Minister James Cleverly said in a joint statement.
This follows months of talks to conclude a bitter political dispute over the Northern Ireland protocol, part of the post-Brexit trading agreement that requires checks on some goods entering Northern Ireland from the rest of the U.K.
Northern Ireland’s power-sharing government collapsed almost a year ago, when the Democratic Unionist Party quit in protest against an effective border in the Irish Sea.
Varadkar said last week that he was hopeful it would be possible to come to an agreement on the protocol and repair relations with Northern Ireland’s political parties. However, he said a deal may not necessarily lead to the restoration of Northern Ireland’s executive.
— CNBC’s Matt Clinch contributed to this report.