Brexit is far from over for the UK and EU member states

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When it comes to Brexit, Brussels is still hoping for the best, but expecting the worst.

The seventh formal round of post-Brexit talks ended last week in a familiar stalemate and mutual blame, capping off a summer of very little progress in the negotiations. Since then, pessimism is mounting in Brussels over the prospects for a deal on the future relationship with the U.K.

Chief European Union Brexit negotiator Michel Barnier has reportedly contacted a number of EU leaders to gather support for a post-Brexit trade deal with the bloc, as he fears talks may be about to collapse. In the UK reports say that Michael Gove, the cabinet office minister, spends the bulk of his time preparing for a no-deal departure.

The EU is pleading with the British government to reveal the plans it has for its post-Brexit state-aid policy, otherwise there is a serious risk that a deal on the two sides’ future relationship won’t be reached.

Bloomberg reports that “with just weeks remaining to secure a wide-ranging trade accord, the U.K. has so far rebuffed EU demands to publicly set out its planned rules for granting subsidies to business after the end of this year.”

A British official said the government would publish its plans in the next few weeks — but at a timing of its choosing rather than to satisfy the EU. The bloc’s chief negotiator, Michel Barnier, has so far refused to allow progress on other issues until the U.K. engages on state aid. 

POLITICO reports that EU officials insist the next formal round of talks in London in the week of September 7 will be crucial to ruling out a no-deal scenario before the transition period ends on December 31.

But on what the EU sees as the core issues — fisheries and level playing field — both sides still seem to be talking past each other. Brussels insists it wants more clarity on London’s future state aid rules to unlock the talks, to ensure the U.K. does not undercut the EU in the future. But Downing Street is determined to have leeway on state subsidies to assist its coronavirus recovery, and refuses to set out its new regime according to the EU’s timetable. The U.K.’s refusal to engage in negotiations on these sensitive topics has only angered EU capitals further and strengthened the sense of unity among the 27 member countries. On his tour of the bloc, Barnier has not received any sign from national leaders to divert course from his current negotiating mandate.

In Brussels, the European Commission has prepared its contingency planning to prevent a cliff-edge scenario in case no deal is agreed, POLITICO reported earlier this week. Barnier also discussed the “readiness” of countries for the end of the transition period with capitals this week.

The Sunday Times reported that the EU is trying to impose “Brexit in name only” on the UK, raising the prospect of a departure with no trade deal in December. A senior Whitehall accused the EU of treating Boris Johnson’s government like Theresa May’s by seeking to impose a deal that would tie Britain to EU rules for ever. In the UK reports say that Michael Gove, the cabinet office minister, spends the bulk of his time preparing for a no-deal departure.The Sunday Times reported that the EU is trying to impose “Brexit in name only” on the UK, raising the prospect of a departure with no trade deal in December. A senior Whitehall accused the EU of treating Boris Johnson’s government like Theresa May’s by seeking to impose a deal that would tie Britain to EU rules for ever.

A small number of pro-Brexit economists say that most trade around the world is done on WTO terms, and the UK would still have access to the EU market, says Euro News.

But many other economists and academics say that crashing out and trading on WTO terms would be damaging for the British economy, hitting the service, manufacturing and agriculture industries hard.

The head of the WTO has warned Johnson that standard trade terms “would slow Britain’s recovery from coronavirus, saying that sticking closer to present arrangements would be better for jobs”, The Times reports.

POLITICO / CDE / COMUNIQ.EU / The Sunday Times / The Week