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- EU raises specter of no deal this year as Brexit talks drag
EU raises specter of no deal this year as Brexit talks drag
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Loading...European Union chief negotiator Michel Barnier raised the prospect of Brexit talks failing to reach a breakthrough by year-end, saying the U.K. has two weeks to come up with a better offer on the financial
settlement.
Barnier called for “real and sincere progress” on the three divorce issues, which include the separation bill, the rights of EU citizens and the Irish border, which has erupted back onto the agenda this week.
“I have to present a sincere and real picture on those three subjects to theEuropean Council and the European Parliament. If that is not the case, then we will continue, and that will put back the opening of discussions on the future,” Barnier said at a news conference in Brussels on Friday with Brexit SecretaryDavid Davis.
Little progress had been expected in this sixth session of talks, but the mood of the news conference was more somber than in recent rounds. Earlier on Friday, Poland’s European Affairs minister, who met Davis in Warsaw this week, also raised the possibility that talks wouldn’t move on to trade until March.
That would narrow the available time to hash out a trade deal, and render almost useless the transition deal that U.K. companies are crying out for. Britain is due to leave the EU in March 2019, with or without a deal, and the ratification of any agreement needs a few months.
“December is absolutely the most important crunch point,” said Mij Rahman of Eurasia group. If there’s no agreement by the December summit, he argues that the two sides will be forced to reassess the whole process, and could consider trying to hash out a minimalist exit deal instead -- a “no-deal deal”. “There may be a rethink as to where we are headed.”
Back in October, as another summit that had been hailed as a crunch meeting was shaping up to be a flop, European Council President Donald Tusk made asimilar assessment of what might lie ahead at year-end.
“If it turns out that talks continue at a slow pace, and that sufficient progress hasn’t been reached, then, together with our U.K. friends, we will have to think about where we are heading,” he said.
EU diplomats have begun work on two versions of draft summit conclusions for the December gathering -- one for the possibility of a breakthrough and another one for continuing stalemate.
The pound rose as much as 0.5% against the euro, as investors were relieved that talks at least hadn't ended acrimoniously.
The U.K. has about two weeks to improve its offer on the bill so that trade talks can get the green light at the summit in December. With the EU asking for about 60 billion euros ($70 billion) and the U.K. so far offering about a third of that, the U.K. side will need to make concessions. That will be hard to sell at home as voters were promised more money would be made available from Brexit -- rather than being left on the hook for bills. Several high-profile figures in May’s Conservative Party are unwilling to offer the EU a settlement.
Source: Bloomberg Pro Terminal
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