The eu are playing a game of ‘who blinks first’ as well I think aren’t they?
I think their preferred options are:
1 no Brexit
2 transition period deal, and no possibility of a hard border in Ireland at end of it, ie Britain signing up to be a rule taker in perpetuity. Ie the option just voted down by HoC.
3 transition period deal, crash out/hard border at end of it
4 crash out/hard border now
So they are holding out for item 2, which is not accepted by uk parliament, but may end up with item 4. I think item 3 would probably get through HoC, and eu may blink at last minute. But I feel it would just be prolonging an inevitable crash out because there is no viable solution to the Irish border question.
A transition period would in theory give the eu and uk more time to prepare for no deal, but I think it would be another two years of arsing around because Uk can’t keave the eu without either breaking the gfa or imposing a border down the Irish Sea.
So really the options will boil down to no Brexit or hard Brexit, which puts us in breach of the gfa, doesn’t it?
The GFA worked because Ireland and GB were both governed by a common rule book.