LONDON/BRUSSELS - Britain is likely to complete its journey out of the European Union in three weeks without a trade deal, British Prime Minister Boris Johnson and European Commission chief Ursula von der Leyen said on Friday.
Britain
quit the EU in January but remains an informal member until Dec. 31 - the end
of a transition period during which it has remained in the EU single market and
customs union.
Both
sides say they want to agree arrangements to cover nearly $1 trillion in annual
trade but negotiations are at an impasse, with Britain standing to lose
zero-tariff and zero-quota access to the huge European single market.
“It’s
looking very, very likely we’ll have to go for a solution that I think will be
wonderful for the UK, we’ll be able to do exactly what we want from January 1,
it will obviously be different from what we set out to achieve,” Johnson told
reporters.
“If
there’s a big offer, a big change in what they’re saying then I must say that
I’m yet to see it,” said Johnson, the face of the “leave” campaign in Britain’s
2016 Brexit referendum.
Von Der
Leyen was quoted by an EU official as telling leaders of the bloc’s 27 member
states attending a summit in Brussels on Friday that prospects for a deal had
worsened.
“The
probability of a no deal is higher than of a deal,” the official said on
condition of anonymity.
Johnson
and von der Leyen have given negotiators until Sunday evening to break the
deadlock over fishing rights and EU demands for Britain to face consequences if
in the future it diverges from the bloc’s rules.
Johnson
must decide whether the deal on offer is worth taking or the future freedom and
domestic political benefits afforded by leaving without one outweigh the
economic costs.
A Brexit
without a trade deal would damage the economies of Europe, send shockwaves
through financial markets, snarl borders and sow chaos through the delicate
supply chains which stretch across Europe and beyond.
NO DEAL?
As EU
leaders lined up to warn of the failure of talks, investors started to price in
the risk of a chaotic finale to the five-year Brexit crisis.
British
stocks fell, euro zone government bond yields fell and sterling fell about 1%
against the dollar and euro.
Italian
Prime Minister Giuseppe Conte said there were still fundamental issues
unresolved in the trade talks.
“Time is
running out and we need to prepare for a hard Brexit,” he said, referring to an
abrupt rupture in trade arrangements.
EU
leaders rejected a proposal from Johnson for a Brexit call with German
Chancellor Angela Merkel and French President Emmanuel Macron on Monday, EU
officials said.
Johnson
is under pressure from Brexit supporters in Britain not to cave to any EU
demands that they say could undermine his promises to regain Britain’s
sovereignty.
Macron
also faces domestic pressure, with French fishermen urging him to ensure the EU
defends their fishing rights.
Asked by
a reporter about an EU proposal for a one-year contingency plan, under which EU
fishermen would keep access to Britain’s fishing waters, he said: “I’m not
asking to have my cake and eat it, no. All I want is a cake that’s worth its
weight. Because I won’t give up my share of it either.”
The Bank
of England said it had taken steps to keep banks lending through 2021 as
Britain prepares for any market disruption from a big change in the trading
relationship with the EU, while also dealing with the COVID-19 pandemic.
https://www.reuters.com/article/us-britain-eu/no-deal-on-brexit-trade-very-very-likely-british-pm-johnson-says-idUSKBN28L0NR
***Additional
reporting by Michael Holden, David Milliken, Andy Bruce, Sujata Rao and Paul
Sandle; Writing by Guy Faulconbridge; editing by James Davey, Timothy Heritage
and Philippa Fletcher