Salzburg, Austria (CNN) The European Union's top political representative issued a stark Brexit warning on Wednesday: Time is running out and there are still huge hurdles to conquer before a divorce agreement can be reached with the United Kingdom.

EU leaders and UK Prime Minister Theresa May had warm words for each other ahead of an informal EU leaders' summit in Salzburg, Austria. But the remarks by Donald Tusk, President of the European Council, exposed the deep chasm that remains between the two sides on certain key sticking points such as the Irish border.

In a brief statement in Salzburg on Wednesday, Tusk said that while proposals hashed out by May and her Cabinet at her Chequers country retreat are a "positive evolution," the issues surrounding the Irish border and economic cooperation need to be "reworked and further negotiated."

If a deal can't be reached, Britain risks crashing out of the EU at the end of March next year in a messy fashion. The Bank of England has warned that house prices would crash, businesses fret over chaos at the Channel ports and airlines worry that the agreements that keep planes in the air across Europe would fall away.

But for a deal to be concluded, each side must find a way of avoiding the necessity to rebuild border posts between Northern Ireland, which will leave the EU with the rest of the UK, and the Republic of Ireland, which will remain in the EU. The removal of border infrastructure was a key part of the Good Friday Agreement that brought peace to Northern Ireland after years of sectarian strife.

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