By Gabriela Baczynska and Jan Strupczewski
BRUSSELS (Reuters) - The European Union will give Ireland some leeway to establish new border arrangements with Northern Ireland in case of a no-deal Brexit, sources in the bloc's political hub Brussels said.
But they said Dublin would soon have to come up with a plan to ensure the integrity of the EU's single market or face checks on its own goods coming into the rest of the bloc.
"Ireland can get transition periods or some temporary opt-outs on the border in the worst-case scenario," a senior EU diplomat said.
"But soon enough it will have to face up to the fact that either there is a border on the island or a border between Ireland and the rest of the EU," the person added.
EU diplomats and officials dealing with Brexit admit it is impossible to set up full border controls overnight as should theoretically be the case if the United Kingdom leaves the bloc without a divorce settlement on March 29.
The issue of a "hard border" on the island of Ireland has hung over Brexit negotiations from the start and is threatening to sink the divorce deal put together over months of painstaking EU-UK talks as the British parliament opposes the Irish "backstop" part of it.
The "backstop" is meant as a last resort, a way to prevent full-blown border controls on goods crossing between EU-state Ireland and the British province of Northern Ireland.
But without a UK-EU free trade deal, yet to be negotiated, that would tie the latter to the bloc's trade rules - anathema to hardline pro-Brexit supporters in Britain and British Prime Minister Theresa May's Northern Irish allies who say it would weaken the province's links with the rest of the country.
Many in Britain, Ireland and the rest of the EU also fear the return of border checks could reignite violence and make checkpoints a target.
In 1998, Britain and Ireland made the Good Friday Agreement to end 30 years of sectarian violence over whether Northern Ireland should remain British or join the Irish Republic. With both states in the EU, checks along the 500-km (300-mile) land border ended.
"The Irish-Irish border is a European border. The Brexit issue is not a bilateral question between the Republic of Ireland and the UK. It's a European issue," European Commission President Jean-Claude Juncker said after talks with Irish Prime Minister Leo Varadkar in Brussels this month.
But an EU official familiar with the bloc's preparations for a no-deal Brexit said: "In a no-deal scenario, Ireland would have to choose between setting up a physical border with Northern Ireland and de facto leaving the single market.
"If there is no physical border, the customs checks would have to take place on all goods coming from Ireland."
The EU has made a point of publishing contingency plans for areas from transport to social benefits to university exchanges as the risk of an abrupt split grows. But it has kept silent on the Irish border.
Varadkar's stark warning last month that the army may have to be deployed to the border "if things go very wrong" highlighted the risks.
The threat that Ireland could loose at least some access to the EU market is not lost on Varadkar who in Brussels spoke of Dublin's readiness to protect the bloc's common economic area.
"It's core to our economic and industrial strategy, core to our prosperity," he said standing side-by-side with Juncker, promising Ireland would not become a "back door" to the EU.
But while Ireland is promising the EU it would implement border checks, Varadkar also said: "We are making no preparations, no plans for physical infrastructure on the border."
EU and Irish sources say the only way to ensure customs controls while avoiding border infrastructure is the backstop.
It envisages that many checks would be carried out away from the actual frontier - in market places or production sites.
"It is not possible to erect a border. It's just impossible and a different solution needs to be found," said a second EU official dealing with Brexit. "The backstop is our template. It is a solution that is ready and it works."
(Writing by Gabriela Baczynska; Editing by Janet Lawrence)