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Brexit last call for a deal

EU and UK prepare for no deal

The clock is ticking for an agreement between the EU and the UK on post-Brexit arrangements. The new deadline has been set for this weekend.  But as of today, the chances of finding an agreement appear slim.

“The situation is difficult, the main obstacles in the negotiations remain on the table,” a senior EU official briefed on the assessment of the progress of the negotiation with the UK on bilateral trade relations said this morning. “Currently the probability of a ‘no deal’ is as high as that of a deal,” the same source added.

Commenting on the unsuccessful outcome of yesterday’s meeting with European Commission President Ursula von der Leyen in Brussels, British Prime Minister Boris Johnson said: “The no deal is a step away, let’s get ready.

Johnson added that he still wanted to try to reach an agreement in the coming days, not excluding his visits to Emmanuel Macron or Angela Merkel in Paris and Berlin.

Knots to unravel

The European Union and Britain are thus preparing for the worst-case scenario, while the teams led by Michel Barnier and David Frost are grappling with discussions on a Brexit deal.

David Frost are grappling with heated discussions ahead of the new deadline on Sunday, when von der Leyen and Johnson could meet again to take a final decision.

There are three knots still to be unravelled to finalise the divorce agreement: the regulation of fishing in the North Sea, the dispute settlement mechanism, and the UK’s access to the single market, respecting its state aid rules.

Brussels takes cover in case of no deal

In view of a possible no deal, the EU Commission has come to the rescue by publishing four emergency measures aimed at “mitigating some of the most significant disruptions” that could occur from 1 January 2021, in the event of a no deal.

These are targeted measures for air and road links, flight safety and fisheries, with proposals to create rules and legal frameworks. Contingency plans have also been developed in London.

The first is a proposal for a regulation that would allow the continuation of air routes between the European Union and Great Britain. The legislative text provides for reciprocity on the part of London and a maximum duration of six months. The same provision is envisaged for road passenger and freight transport.

A third proposal concerns the continuation of safety certificates in air transport.

Finally, the Commission proposes that on the fisheries front, the parties should be able to allow reciprocal access to their waters until 31 December 2021, as is currently the case.

The gap remains wide

According to a Downing Street source, the British Prime Minister and the President of the European Commission have verified that “very wide” distances remain.

The same source, quoted by the Kingdom’s media, spoke of “a frank discussion on the significant obstacles that remain in the negotiations”. He added that “very large differences remain between the two sides and it is not yet clear whether they can be bridged” to reach a free trade agreement or whether London will instead end the post-divorce transition period on 31 December with a no deal.

Three crucial points remain unresolved so far: fishing rights, the European request for a British alignment in some regulatory areas to protect fair trade competition (the so-called level playing field) and the governance of possible future legal disputes.

Merkel: we are ready for No-deal

A trade agreement between the European Union and the United Kingdom “is still possible”, but Brussels should not accept compromises that could lead to unfair competition from British companies: this is what German Chancellor Angela Merkel said during her speech at the Bundestag in Berlin.

No post-Brexit agreement, therefore, should undermine the European single market. The next meeting between the European and British authorities might not yet be the decisive one, the chancellor added: “There is still the possibility of an agreement. I don’t think we will know tomorrow whether it will succeed or not, I can’t promise that”.

Merkel’s position is that a no-deal remains an option “if there are conditions from the British side that we cannot accept”. In that case, the German chancellor said she was ready “to follow a path without a trade deal” with the UK.

British grievances

Demonstrating the distances that still permeate the negotiations are the words of British Prime Minister Boris Johnson, according to whom the European Union would like to leave the United Kingdom as “the only country in the world not to have sovereignty over its fishing waters”. This, for the record, would be due to the fact that competence over fishing and fisheries resources is an exclusive EU competence, and access to the single market could therefore involve some form of adjustment even by the UK post-Brexit.

For the British Prime Minister, the idea that if the EU were to ‘pass a new law in the future that we do not comply with’, the EU would ‘automatically have the right to punish us and to retaliate’ remains unpalatable.

From the EU perspective, ensuring consistency between EU and British law in certain areas is essential precisely to protect competition and the integrity of the single market, as Angela Merkel herself has mentioned.

At the beginning of 2021, in fact, the UK will be out of the single market and the customs union and, without an agreement on future trade relations, duties and border controls on goods will return.

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