UK business leaders warned on Thursday (11 June) that they were being led towards a no-deal Brexit that they are ill-prepared for, as both the EU and UK negotiators toughen their stances.
“The resilience of British business is absolutely on the floor,” said Carolyn Fairburn, director-general of the Confederation of British Industry, in a plea to both sides to reach a deal and avoid an additional economic hit to firms.
“The firms that I speak to have not a spare moment to plan for a no-trade deal Brexit at the end of the year – that is the common sense voice that needs to find its way into these negotiations,” she said, warning that “if we have a political timescale that takes us to a brinksmanship deal in December that will be catastrophic for British business – they will not be ready.”
On Wednesday, the Paris-based OECD [Organisation for Economic Cooperation and Development] warned in its June economic forecasts that the UK was likely to suffer an 11.5% recession in 2020 as a result of the coronavirus pandemic, marginally worse than Italy and France.
For his part, UK Cabinet office minister Michael Gove, who is responsible for implementing the Withdrawal Agreement, told the House of Commons on Wednesday that there had been “sadly no movement on the most difficult areas where differences of principle are at their most acute, notably on fisheries, governance arrangements and the so-called level playing field.”
But he also repeated the government’s line that the post-Brexit transition period would end on 31 December, with or without an agreement.
Three week-long rounds of online talks between teams led by EU Future Relations Task Force leader Michel Barnier and UK chief negotiator David Frost, the latest of which concluded last week, have failed to break a stalemate, particularly on fisheries, governance and regulation.
Prime Minister Boris Johnson will hold a videocall with European Commission President Ursula von der Leyen in Brussels on 15 June, officials announced on Thursday. However, although initially billed as a key milestone in the talks, where the two sides would assess whether a trade deal can be finalised before the end of 2020, major decisions are likely to be avoided.
Despite the lack of progress, there is no suggestion that either side is planning to walk away from the talks. Instead, it is more likely that the onus will be shifted onto the German government, which takes over the EU’s rotating six-month presidency in July, to broker a compromise by the autumn.
But battle lines on both sides continue to harden.
On 18 June, the European Parliament will debate and vote on their own position on an EU-UK pact and is expected to offer strong support to the Barnier Task Force on the EU’s red lines, which emphasise the role of the European Court of Justice as the sole interpreter of matters pertaining from EU law, and the level playing field.
EU lawmakers are also expected to threaten to veto any trade pact that is too generous to the UK.
They could also accuse Boris Johnson’s government of attempting to back-track on the commitments made in the Withdrawal Agreement that took the UK out of the bloc in January, a charge made by Barnier in recent weeks.
On Wednesday, Barnier told the European Economic and Social Committee that the UK was “demanding a lot more from the EU than Canada, Japan or other partners,” and added that “we cannot and we will not allow this cherry picking.”
[Edited by Zoran Radosavljevic]