The European Union is willing to compromise to rescue troubled Brexit talks by softening its demand that Britain heed EU rules on state aid in the future, diplomatic sources told Reuters.
They said Brussels could go for a compromise entailing a dispute-settling mechanism on any state aid granted by the UK to its companies in the future, rather than obliging London to follow the bloc’s own rules from the outset.
Provisions to ensure fair competition pose the biggest stumbling block in the negotiations aimed at sealing a new trade accord from 2021 following Britain’s exit from the EU in January after 46 years of membership.
The 27 EU countries have long demanded so-called “level playing field” guarantees from Britain if it wants to continue selling goods freely in the bloc’s lucrative single market of 450 million people – after Britain’s standstill transition period following Brexit expires at the end of this year.
Without an agreement, trade and financial ties between the world’s fifth largest economy and its biggest trading bloc would collapse overnight, likely spreading havoc among markets, businesses and people.