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UK, EU reach 'breakthrough' Brexit accord, opening way for trade talks

The U.K. and the European Union announced a breakthrough in negotiations around Britain's exit from the bloc Dec. 8, settling matters including the Irish border and paving the way for talks on terms of trade.

The European Commission said that, based on a joint report agreed by European Commission negotiators and the U.K. government, "sufficient progress" has been made in the key areas of citizens' rights, the financial "divorce" bill and the status of a post-Brexit border between the Republic of Ireland and Northern Ireland to allow talks to progress to their second phase.

The question of the border had been a sticking point, but the U.K. has now guaranteed there will be no hard border. The rights of EU citizens living in the U.K., and those of U.K. citizens living in the EU, will be protected.

The accord, endorsed by British Prime Minister Theresa May in a meeting with European Commission President Jean-Claude Juncker early Dec. 8, must now be approved by the European Council.

"This is a difficult negotiation but we have now made a first breakthrough," Juncker said. "I am satisfied with the fair deal we have reached with the U.K. If the 27 member states agree with our assessment, the European Commission and our chief negotiator Michel Barnier stand ready to begin work on the second phase of the negotiations immediately."

"I hope and expect we will be able to get the endorsement of the [remaining 27 EU states] to what is a hard-won agreement in all our interests," May said.

In early trading, the British pound rose about 0.3% against the U.S. dollar and about 0.4% against the euro.

European markets opened higher. The German benchmark DAX index was trading 0.89% higher that the previous day's close at 9:22 a.m. CET, while France's CAC 40 was up 0.54% and the Euronext 100 was up 0.48%.

The U.K.'s FTSE 100 was down 0.02%.

Hang Seng closed 1.19% higher and Nikkei 225 rose 1.39% at market close.