The European Commission cannot guarantee there will be a trade agreement with Britain, EU chief executive Ursula von Der Leyen has said, adding that the bloc is now prepared for a no-deal Brexit.
“The next days are going to be decisive. The European Union is well prepared for a no-deal scenario,” von der Leyen told the European Parliament this morning.
“With very little time ahead of us, we will do all in our power to reach an agreement. We are ready to be creative”, she said.
“We want know what remedies are available in case one side will deviate in the future, because trust is good but law is better. And crucially in the light of recent experience a strong governance system is essential to ensure what has been agreed is actually done.”
Trade negotiations are restarting this week over Zoom, after a member of the EU’s negotiating team tested positive for Covid last Thursday.
Time is running short for both sides to secure a deal before the UK leaves the EU’s single market and customs union on 31 December.
Any deal between Britain and EU would need to be ratified by parliaments on both sides, meaning the next few days are crucial for any hopes to secure an agreement between the two parties.
Bank of England governor Andrew Bailey yesterday warned that a no-deal Brexit would leave worse long-term economic scarring for the UK than the coronavirus pandemic.
Bailey told a Westminster committee there was “no question” a no-deal Brexit would be worse long-term than Covid as crunch talks between the two sides enter their final hour.
“The long-term effects… I think would be larger than the long-term effects of Covid,” he said.
“It is in the best interests of both sides…for there to be a trade agreement and for that trade agreement to have a strong element of goodwill around it in terms of how it is implemented.”
Both EU chief negotiator Michel Barnier and British envoy David Frost remain locked in talks over the main Brexit sticking points.
The pair have so far not been able to reach agreements on fisheries, the so-called level playing field, and settling future disputes between Britain and the EU.
A European Commission spokesperson said negotiators have not yet found a deal on sharing access to fishing waters after the post-Brexit transition period ends on New Year’s Eve — in just five weeks time.
A spokesman for the Prime Minister said: “We’ll only be able to make progress if the EU accepts the reality that the UK will have the right to control access to its waters at the end of this year.”
“There are significant gaps that do remain between our positions in the most difficult areas, and there is much work still to be done if we are to bridge those gaps.”