Chance of no-deal Brexit looking more likely

D espite the fallout from the coronavirus crisis the prime minister Boris Johnson has insisted there will be no delay beyond December to the UK’S transition period to leave the EU.

The EU-27 this week published its negotiating proposals for a trade deal, but these were predictable and unlikely to secure support from the UK Government. Meetings have ground to a halt, with all travel by EU officials banned and a lack of appetite in Brussels to discuss issues other than the battle against Covid-19.

If the UK sticks to its no delay stance, the risk of a no-deal Brexit in December increases. It is difficult, however, to envisage the government in London allowing this, given the disastrous impact on the economy. This week sterling sank to a 35-year low against the US dollar. It also fell sharply against the euro, despite the virus and economic damage being worse in key eurozone countries.

The EU farm commissioner Janusz Wojciechowski has written to all member states confirming flexibility over Common Agricultural Policy (CAP) regulations because of the coronavirus crisis.

As a first gesture he has said all member states will have an extra month to submit CAP payment applications.

Beyond that he has promised the Commission recognises the scale of the problems faced in many countries, promising flexibility and a speedy response as problems develop. He has underlined the importance of maintaining food supplies, promising that Brussels will take the steps necessary to minimise disruption.

Beyond that, the Croatian EU presidency says it will hold a video conference session with member states next week on the impact of the virus on food supply and what practical and financial steps the EU can take to tackle specific challenges.

Beyond the crisis, most issues including CAP reform and the new farm to fork policy, have been kicked into touch.

History suggests coronavirus will be beaten, the question being when and significantly what state global economies will be in when this happens.

Some analysts have been focusing on the aftermath and the trade implications. Their views are far from encouraging. They say border restrictions in response to the disease have disrupted trade and they forecast these will continue for some time.

Their view is that it will not be a case of a speedy return to normal, and warn that the beef industry in particular will face problems from the disruption of export markets. There are also concerns that the aftermath of the crisis will see a drive in favour of homeproduced food.

While this could have a positive impact at one level, for the EU as a net food exporter this could be a future threat.

EU farm commissioner Janusz Wojciechowski has promised flexibility.