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As clock ticks, EU and UK tell each other to budge on Brexit

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A frustrated European Union and piqued Britain both exhorted the other on Tuesday (20 October) to compromise to avoid a fast-approaching disruptive finale to the five-year Brexit drama that would add to economic pain from the coronavirus crisis, write Elizabeth Piper, Michael Holden and Costas Pitas in London.
Failure to clinch a trade deal when Britain leaves a standstill transition period on 31 December would sow chaos through supply chains and undermine Europe’s economy as it already sees jobs and businesses pulverized by the COVID-19 disease.

After an EU demand for concessions, Prime Minister Boris Johnson broke off talks and said it was time to prepare for a no-deal Brexit.

The EU has since offered to intensify talks and open discussions on legal texts of a draft deal, but Britain maintains there is no basis to resume discussions without a fundamental change in approach.

“My message: we should be making the most out of the little time left,” Michel Barnier, the EU’s chief negotiator, said after a telephone call with British counterpart David Frost.

“Our door remains open.”

The European Commission said it was ready to negotiate though both sides would have to compromise.

UK says Brexit talks situation remains unchanged

Johnson’s spokesman said the EU had to show it was taking a fundamentally different approach.

EU diplomats cast Britain’s moves as bluster and a frantic bid to secure concessions before a last-minute deal, though an ally of German Chancellor Angela Merkel said chances of a deal were narrowing.

“At the moment, I see the chances worse than 50-50,” Detlef Seif, Brexit rapporteur for Merkel’s conservatives in the lower house of parliament, told Reuters. “The ball is still in Britain’s court at the moment.”

There is concern in some European capitals that Johnson may judge that the domestic political benefits and potentially the long-term economic freedom of a noisy no-deal exit outweigh the benefits of a shallow trade deal.

“If they want to get back to the negotiating table, they can,” said one EU diplomat. “If they want to jump – we won’t be able to stop them.”

“All this posturing is only aimed at strengthening Johnson’s hand. If they don’t want to talk, that’s their choice. There is no point at this stage to give them anything more,” said another EU diplomat.

Britain formally left the EU at the end of January, but the two sides have been haggling over a deal that would govern $900 billion in trade from car parts to medicines.

Johnson and his Brexit supremo Michael Gove will tell businesses on a video call on Tuesday to step up preparations for the end of the transition period.

Failure to strike a deal with the EU would be “extremely damaging” and cut profits by up to a quarter at carmaker Bentley, its boss told Reuters, as the government urges firms to plan for potential disruption.

Brexit

Britain expects 'very significant' week for Brexit talks as clock ticks down

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Britain and the European Union are heading into a “very significant” week, British Foreign Minister Dominic Raab said on Sunday (29 November), as talks over a trade deal enter their final days with serious differences yet to be resolved, writes .

EU negotiator Michel Barnier told reporters in London that “works continue, even on Sunday” on his way to a negotiating session, as both sides look for a deal to prevent disruption to almost $1 trillion (752 billion pounds) of trade at the end of December.

“This is a very significant week, the last real major week, subject to any further postponement... we’re down to really two basic issues,” Raab told the BBC.

Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights.

But Britain’s transitional EU exit agreement - during which the bloc’s rules continue to apply - expires on 31 December, and Britain says it will not seek any extension. A deal would have to be ratified by both sides, leaving little time for new delay.

“The bottom line is... in the ordinary course of things we need to get a deal done over the next week or maybe another couple of days beyond that,” Raab told Times Radio in a separate interview.

Earlier, he had signalled some progress on the ‘level playing field’ provisions which look to ensure fair competition between Britain and the EU, and said fishing remained the most difficult issue to solve.

Despite accounting for 0.1% of the British economy, fishing rights have become a totemic issue for both sides. Britain has so far rejected EU proposals and remains adamant that as an independent nation it must have full control of its waters.

“The EU have just got to recognize the point of principle here,” Raab told Times Radio.

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Brexit: ‘Frankly, I cannot tell you if there will be a deal’ von der Leyen 

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Addressing the European Parliament this morning (25 November) European Commission President Ursula von der Leyen said that she couldn’t say whether the EU would be able to reach a deal with the UK on its future relationship before the end of the year. She said the EU side was willing to be creative, but that it would not put the integrity of the Single Market in question. 

While there has been genuine progress on a number of important questions, such as law enforcement, judicial co-operation, social security coordination and transport, von der Leyen said that the three ‘crucial’ topics of level playing field, governance and fisheries remained to be resolved.

The EU is seeking robust mechanisms to ensure that competition with the UK remains free and fair over time. This is not something that the EU can skate over, given its proximity and the scale of existing trade ties and integration in EU supply chains. The UK has to date been ambiguous about how it would deviate from European norms that it played no small role in shaping, but the logic of Brexit supporters is that the UK could become more competitive through deregulation; a point of view that obviously makes some EU partners a little ill at ease.

‘Trust is good, but law is better’

The need for clear legal commitments and remedies has become starker following the UK’s decision to introduce an Internal Market Bill that includes provisions that would allow it to deviate from parts of the Ireland/Northern Ireland Protocol. Von der Leyen said that strong governance was essential in "the light of recent experience".

Fisheries

On fisheries, von der Leyen said that no-one questioned the UK’s sovereignty of its own waters, but held that the EU needed "predictability and guarantees for fishermen and fisherwomen who have been sailing in these waters for decades, if not centuries".

Von der Leyen thanked the parliament for their support and understanding in the difficulties such a late agreement presented to them. A final deal will be several hundred pages long and need to be legally scrubbed and translators; this is unlikely to be ready by the next plenary session of the European Parliament in mid-December. It is generally acknowledged that if a deal is to be arrived at a plenary on 28 December will be needed. Von der Leyen said: “We will walk those last miles together.”

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UK will remain global leader for asset management after Brexit: Sunak

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British Finance Minister Rishi Sunak (pictured) said on Tuesday (24 November) that he was determined that the United Kingdom would remain a global leader for asset management after Brexit, writes William Schomberg.

“We’re beginning a new relationship with the EU. And as we do so, we are determined that the UK will remain a global leader for asset management,” Sunak said in comments to a conference organized by The Investment Association, an industry group.

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