Brussels has been urged to consider the impact of failing to broker a trade agreement with Britain as well as the outbreak in its response to the bloc’s most alarming downturn. Ireland and Belgium are known to have raised concerns about the added shock of a hard Brexit at recent discussions over the EU’s next seven-year budget and $750 billion retrieval fund.
Their warnings have further complicated the struggle to deliver a EU27 response to the lockdowns enforced to slow the spread of this pandemic. Belgium and Ireland are among the nations that have the most to lose from a disruption in trade with the UK in 2021. After Boris Johnson insisted he would not extend the transition period past the transition deadline — Britain is set to leave the EU’s single market and customs union with or without a deal.
The Prime Minister raised the possibility of a no-deal exit if an agreement doesn’t look possible, this comes after Britain sanctioned an ultimatum that could see his lead negotiator walk out of talks this Autumn. Both sides are still wrangling over controversial EU demands to secure the access to Britain’s fishing grounds and keep the country tied to the bloc’s rulebook and under the watch of the European Court of Justice.
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At a recent meeting of EU diplomats, Belgium said the European Commission’s proposed recovery fund didn’t take into consideration the threat. Ireland added that any disruption triggered by Britain’s departure would need to be regarded as part of the seven-year budget and the bailout package. Both Dublin and Brussels are expecting to get a smaller share of the grants as they’ve emerged relatively unscathed. As the clock counts down to the end of the year, member states and companies have been warned to prepare for a no-deal Brexit.
Sources said firms are urged to consider implementing contingency measures that were made from the Commission when Withdrawal Agreement talks appeared on the brink of collapse. If there is a deal struck between the EU and UK, bosses were told that they would have to get ready for a very distinct trading relationship between the two sides.
An EU official said: “What we are consistently trying to remind member countries, but also all stakeholders, that under all circumstances — deal or no deal — at the end of the year that the commercial relationship between the EU and UK will look very different.” Despite a good and ambitious agreement in place, there won’t be frictionless movement of goods, services, people and capital that we know from the single market.