EU warns of Brexit chaos as UK fumes
Transition talks stumble as top EU negotiator says Britain is putting the possibility of a deal at risk.
Brexit negotiations have broken up in acrimony after the European Union’s chief negotiator raised the prospect of the United Kingdom crashing out of the bloc next year into a legal limbo.
Michel Barnier’s comments provoked an angry reaction in London, and the pound fell.
Barnier said yesterday he was waiting to hear what Britain wanted to achieve from the talks, and warned that its continuing disagreement over the terms of a twoyear transition period risked damaging the chances of a deal.
If the arguments persisted, the transition period – which businesses urgently want – could not be taken for granted, he said.
His British counterpart, Brexit Secretary David Davis, hit back, saying he was surprised by Barnier’s comments and accusing the EU of a ‘‘fundamental contradiction’’ in its approach to the talks.
The dispute matters because the UK and the EU have just over a month to strike a deal on the terms of the transitional period that is due to come into force after Brexit in March 2019. Only once this is agreed can the negotiations move on to discussing the shape of the future trade partnership between them.
Barnier said he hoped the disagreements would be solved in the next negotiating round.
‘‘Time is short, very don’t have a minute to want to succeed.’’
As the future trade deal between the two sides almost certainly won’t have been completed on the day Britain leaves the bloc, businesses on both sides would plunge into a legal and regulatory limbo in March next year.
This would mean tariffs would be slapped on goods, and in the worst case, data transfers, air travel and food supplies could also be disrupted.
Businesses have set a deadline of late March this year to get a deal pinned down before they activate their contingency plans – including moving jobs and business out of Britain. Many banks have already taken steps to protect their business short, we lose if we and aren’t relying on a transition deal.
‘‘Given the intense work that has taken place this week, it is surprising to hear that Michel Barnier is unclear on the UK’s position in relation to the implementation period,’’ Davis said.
A senior British official said it was not a given that Barnier could keep all EU member states on board, as EU businesses also want a transition deal.
The official also pointed out that a £39 billion financial settlement would be off the table without an agreement.
British Prime Minister Theresa May, under pressure from hardline Brexit backers in her party, has toughened her stance on the transition in recent weeks. Initially, the UK was expected to accept the EU’s conditions wholesale, but amid accusations that the arrangement will leave Britain a ‘‘vassal state’’ of Brussels, May has raised a series of objections.
Transition will preserve access to the European single market and Britain will have to keep abiding by all the rules, while having no say in making them and no voting power in the bloc. The UK doesn’t want to have to accept new rules that are made during the transition, amid fears that the EU could adopt rules that would hurt British interests.
The EU has also toughened its stance, and has threatened to unilaterally suspend the UK from the benefits of the single market if it breaks rules during the two-year period.
Both sides have also raised the prospect of the timetable slipping for the withdrawal agreement from an initial target of October, which was intended to allow the deal to go to the British and EU parliaments for approval in time for exit day in March 2019.
Davis has said the end of the year may be a more realistic deadline, while Barnier mentioned November yesterday.
The UK didn’t provide the EU with an update on the future relationship yesterday, as planned. Barnier said this was because of scheduling issues, but he was waiting for Britain to make its choices clearer. May’s cabinet is yet to decide on what kind of future trade deal it will seek.