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Not for the first time, Theresa May walked into a room of EU27 leaders making Brexit demands that left her fellow leaders more confused than comforted, and struggling to muster much Christmas goodwill for the beleaguered British prime minister.

In a pre-dinner exchange at the Brussels summit, May was grilled by her counterparts over exactly what she needed from the EU to secure support for her Brexit deal in Westminster. By the time the evening ended, it was clear she had failed to convince.

The FT has all the details of a night where May left leaders baffled at her ambitious but ambiguous demands over a backstop plan for Northern Ireland that is fiercely criticised in Westminster. It soon became evident the prime minister was seeking more than simple “assurances” on a draft exit treaty she agreed with the EU just a few weeks ago.

The prime minister said she did not want to renegotiate, but at the same time asked for a process of talks. She expressed support for the agreed withdrawal treaty, yet asked to effectively put a 12-month limit on the Irish backstop plan. She denied wanting to make big changes to the package, but sought a non-binding political declaration on future relations to be added to the exit treaty as an annex, giving it legal force.

As one diplomat noted, Mrs May basically made clear she needed to renegotiate the withdrawal treaty, raising demands that had been rejected earlier this year. More importantly, “not one person in the room” thought she would be able to win a vote on the exit package, even if a few concessions were granted.

It resulted in a serious setback for Mrs May’s hopes of salvaging her Brexit deal. Leaders told her that there will be no substantive renegotiations on offer. A short EU text agreed before midnight stripped out helpful language and promises to start a process to come up with further assurances on the backstop. Despite being part of an initial draft, all EU27 governments on Thursday night supported getting rid of it.

“I find it uncomfortable that it’s the EU being asked to come up with proposals,” lamented European Commission president Jean-Claude Juncker after the dinner.

The evening may have lacked the drama of September’s Salzburg “ambush”, but some tired diplomats relayed their frustration at Mrs May again squandering sympathy for her situation by misreading the room. Others said the outcome was not down to her missteps, but leaders realising how hopeless the situation is in Westminster in the run-up to the first vote.

Angela Merkel was among the half a dozen leaders who pressed the prime minister on the specific changes she sought, and whether they would pass muster with MPs. Officials said Mrs May failed to offer substantive answers and instead told them to “trust in her judgement”.

It was a stark change of tone after the day started with a concerted push from some leaders to praise the prime minister for her survival skills. “She has really risen to the occasion. I really admire her. She is an able leader,” gushed Mark Rutte, the Dutch premier.

It ended with officials warning against offering the prime minister sweeteners that would only whet the appetite of the House of Commons.

“If you give something now it will be put in the fire over Christmas, used for heating and burned, and then we will have to find something else to give after Christmas — which will not be possible,” said one diplomat.

Other summit takeaways: “are we the baddies”?

Striking a deal on the EU’s next long-term budget is helping to make Brexit look easy. Faced with the loss of the UK contributions and ever-more ambitious policy goals (migration, security), EU27 leaders struggled to even find common ground on how big the union’s next long-term budget should be.

In a frank intervention, Angela Merkel said budget negotiations were much easier in the past when “bad guy” David Cameron insisted on not paying one penny more. “Now it will be more difficult to find out who the bad guy will be,” mused the German chancellor.

Chart du jour: calling time on the extraordinary

After being late to the QE party, the ECB has joined the US Federal Reserve and Bank of England and called time on nearly four years of mass bond-buying (chart above). The much-trailed end of the QE era comes as the eurozone economy is back on its feet and with inflation steadily creeping up. But the central bank will keep dipping its toes in the market by reinvesting profits for a few years to come. The editorial team at FAZ — longstanding critics of ECB policy — complain that Mario Draghi's stimulus still has a way to run:

“The ECB's balance sheet remains as bloated as ever. Unlike the US Federal Reserve, which has been regarded as a major role model since the financial and economic crisis that has lasted ten years, the ECB is not reducing its bond portfolio. It also does not raise interest rates, but stays with the zero interest rate and also sticks to negative interest rates for banks.”

Trans-Europe Express

Strasbourg shooting
French police on Thursday night caught and killed Cherif Chekatt, a 29-year old accused of murdering three people and injuring at least 12 in Strasbourg on Tuesday night. Le Monde reports that Isis have claimed responsibility for the attack.

Cameron's legacy
A Eurosceptic parliamentary group set up by David Cameron’s Tories has been ordered to pay back nearly half a million euros of EU funds after an investigation into their spending. The Guardian has the scoop.

Google's new battle
It's crunch time in the long-running battle to revamp the EU's copyright rules and Google is ramping up its lobbying against regulations it fears will impose stricter liability requirements on its search engine and YouTube (Politico).

Gilets jaunes and the alt-right
Guy Verhofstadt, leader of the liberals in the European Parliament, says France's “yellow vest” protesters were a movement of “decent, middle-class protest against a new tax on diesel fuel…which has been hijacked by professional thugs and extremists railing against migrants”. (Project Syndicate)

Judging diesel gate
The EU's lower court has said the decision by Brussels to water down emissions rules is “illegal”. (FT, SZ)

mehreen.khan@ft.com; @mehreenkhn

michael.peel@ft.com; @Mikepeeljourno

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