Austria: May humiliated by Salzburg ambush as she fights to save Chequers Brexit Plan in Austria: by Dan Sabbagh, Daniel Boffey and Pippa Crerar

Theresa May was left fighting to save her Chequers Brexit plan and with it her authority as prime minister after she was ambushed at the end of the Salzburg summit when EU leaders unexpectedly declared that her proposals would not work.

The prime minister was thrown on to the defensive – just over a week before the Conservative party conference – when EU leaders led by Donald Tusk and Emmanuel Macron rejected her Chequers plan as it stood, prompting hard Brexit Conservatives to demand it be abandoned.

May was also set an October deadline for a solution on the Irish border issue just hours after informing Leo Varadkar, the Irish taoiseach, in a private breakfast meeting that she felt it would be impossible to come to a compromise within such a timescale.

A clearly nervous and angry May told reporters that EU leaders were engaged in “negotiating tactics” designed to throw her off course. “I have always said these negotiations were going to be tough,” she said. “And at various stages of these negotiations, tactics would be used as part of those negotiations”.

The assault on May’s plan came shortly after a lunchtime meeting of EU leaders in the Austrian city, where they discussed the Brexit talks in May’s absence. EU council president Tusk declared that Chequers “would not work” while French president Macron said it was “not acceptable”.

A combative Macron accused British Brexiters of lying about how easy it would be to negotiate an exit from the EU on terms favourable to the UK.

“Those who explain that we can easily live without Europe, that everything is going to be alright, and that it’s going to bring a lot of money home are liars,” said Macron. “It’s even more true since they left the day after so as not to have to deal with it.”

Read more: May humiliated by Salzburg ambush as she fights to save Chequers plan | Politics | The Guardian

Ukraine - The Netherlands:: Dutch to demand limits on Ukraine deal at EU summit- by Gabriela Baczynska

Dutch Referendum on Ukraine:PM  Mark Rutte 

Dutch Prime Minister Mark Rutte will ask European Union leaders on Thursday December 16 to rule out Ukraine joining the bloc for now and to place clear limits on the rewards they offer Kiev under a landmark cooperation agreement, diplomatic sources told Reuters.

Failure to meet the Dutch demands would jeopardize the agreement, which establishes closer political ties and envisages a gradual freeing-up of trade to bind Ukraine closer to western Europe and draw it away from Russia's orbit.

Rutte is trying to free himself from a political bind after Dutch voters, concerned about the costs, rejected the so-called association agreement in a referendum in April. If his demands are met, he plans to go back to his parliament to win an endorsement that would overwrite the negative vote.

Read More: Exclusive: Dutch to demand limits on Ukraine deal at EU summit | Reuters

Brexit fears stalk currency markets ahead of EU summit - by David Oakley, Elaine Moore and Roger Blitz

"To be or not to be"

Investors are betting that sterling is heading for another big tumble as currency markets are gripped by Brexit fears.

Net short positions on the pound have increased to the highest level since the summer of 2013, according to data from the US Commodity Futures Trading Commission.High quality global journalism requires investment.

With prime minister David Cameron expected to announce the date for the vote soon, possibly at the EU summit this week, some investors are predicting a rocky ride for sterling in the currency markets in the next few months.

The pound has fallen about 8 per cent since the middle of November on a trade weighted basis, with investors citing the uncertainty surrounding the Brexit vote, which could come as early as June, as one of the main reasons for the weakness in the currency.

“We need to be prepared for a choppy market,” said James Maltin, investment director at wealth manager Rathbones. “The Brexit debate may be about to heat up. It is yet another uncertainty out there that could hit the UK markets.”

Some analysts fear a potential Brexit could spark a recession, with Nomura, the Japanese bank, warning that the pound could fall 10 per cent to 15 per cent if overseas investors prove unwilling to finance Britain’s current account deficit.

Mark Carney, governor of the Bank of England, warned in January that concerns about Britain’s exit from the EU could test “the kindness of strangers” that the country relies on to fund its hefty current account deficit with the rest of the world.

Britain has a relatively large current account deficit of 3.7 per cent of gross domestic product. The worry is that overseas investors, which hold £427bn in UK government bonds, or a quarter of the market, might start to sell, putting further pressure on the pound.

Read more: Brexit fears stalk currency markets ahead of EU summit - FT.com