Brussels has warned EU governments not to break ranks or entertain the idea of side deals with Britain if trade talks fail, calling for a firm line in order to force the Kingdom – United to return to the negotiating table “as soon as possible” after January 1.
According to a diplomatic note seen by the Financial Times, EU member states have been warned by Brussels not to do anything that would mitigate the consequences of a no-deal end to the Brexit transition period on January 1.
An EU official familiar with the discussion said Brussels had “no illusions” that a no-deal Brexit would be highly unpredictable. “Everyone understands that there is no guarantee that the British will come back to the table.”
A second high-level European diplomat said hopes for a deal were fading. “A deal would, of course, be better, but it seems the question is not whether we can prevent the Brexit ship from hitting the rocks, but how it can be refloated.”
As negotiators made one final attempt to secure a breakthrough, British Prime Minister Boris Johnson on Friday warned that it was “very, very likely” that Britain would leave the single market without a trade deal.
Ursula von der Leyen, president of the European Commission, told EU leaders at a summit in Brussels that there was a “higher probability” that the negotiations would fail rather than succeed.
Brussels and London will decide the fate of the talks on Sunday. Despite this, high-level EU figures, including the Irish and German foreign ministers, said on Friday they continued to believe a deal was possible.
But, time is running out, the EU’s trade talks task force, made up of national diplomats, met on Thursday to go through no-deal measures that Brussels released earlier today.
According to the meeting’s diplomatic note, national governments were urged to be careful not to expand on the EU’s “no deal” unilateral emergency measures released by the Commission this week. The measures mainly cover temporary arrangements for air and road transport.
A Brussels official told the assembled diplomats that “an incentive must be maintained” for the UK to return to the negotiating table “as soon as possible” if the negotiations are not successful this year.
National governments were informed that it was important not to do anything that would replicate the benefits of EU membership, beyond what was contained in the specific, time-limited measures designed to maintain aircraft in flight and moving trucks.
The decision not to include the so-called “fifth freedom” – allowing intra-EU air freight movements – and to deny “cabotage” rights that would allow British trucks to make landings across Europe was explicitly designed to keep up the pressures, diplomats were told.
With a no-deal outcome looming, the pound fell in choppy trading on Friday. The British pound slipped as much as 1.2% in afternoon trading, before cutting losses to around 0.4% to trade at $ 1.3241. It lost 1.5 percent over the past week in its biggest drop since September.
The negotiations between Brussels and London are mainly driven by demands from the EU for a level playing field that would ensure that its companies are protected from unfair competition. Mr Johnson said that the demands are an affront to sovereignty.
But leaders, including Dutch Prime Minister Mark Rutte and his Irish counterpart Micheál Martin, have stressed that the two sides must strive to reach a deal, warning of the economic blow of a no-deal outcome.
“The implications are very serious for all parties concerned in the event of a no-deal and I think all politicians in the UK and across Europe need to think about this,” Martin told reporters at the summit. from Brussels.
Mr Rutte said: “It would be inexplicable to the world if the UK and Europe could not come to an agreement.”
Additional reporting by Jim Pickard in London