Boris Johnson has told Angela Merkel that he is prepared to take the UK out of the EU’s institutions on January 1st without a deal. Meanwhile, Michel Barnier has hinted that the EU is ready to grant the City of London access to European markets after the transition period.
Britain’s prime minister has told the chancellor of Germany that the United Kingdom would leave the EU Single Market and Customs Union to trade with the bloc on the same terms as Australia. While Australia does not have a free trade agreement with the EU has individual deals in place for specific goods.
A Downing Street spokeswoman said that during the telephone conversation on Tuesday, “the prime minister underlined the UK’s commitment to working hard to find an early agreement out of the intensified talks process” on the future relationship between London and Brussels.
“He also noted that the UK equally would be ready to leave the transition period on Australia terms if an agreement could not, in the end, be reached,” she added, according to Reuters.
Prime Minister Johnson is still hopeful that a deal can be struck by the end of this month, while his government is suggesting closer to September, three months before the end of the transition period, during which the UK remains tied to the EU’s trade rules.
Last week, Dr Merkel warned both the German parliament and the European Union to prepare for a possible ‘no deal’ scenario.
Negotiations between the EU and the United Kingdom ended early last week on Thursday, indicating some acrimony between the two parties. The British negotiator David Frost said that “significant differences” remained, while his European equivalent Michel Barnier suggested that the UK did not “respect” the EU’s position.
However, there appeared a softening of approach from the EU as Michel Barnier has said that Brussels is “ready to grant” City of London access to European Union markets at the end of the transition period as part of any deal.
Documents by the House of Lords European Union Committee reported on Tuesday revealed that Mr Barner told peers: “We are ready to grant equivalence.
“The time for decisions is in the autumn, in good time, in the global context of our negotiations on many subjects with the UK.”
Mr Barnier also hinted that there might be room for manoeuvre on the EU’s insistence that the European Court of Justice arbitrates a future UK-EU trade deal.
“I do not imagine that it would not be possible to find some creative solution to deal with these issues,” the Brussels bureaucrat said. “We are open to being creative so that we keep various sides happy.”
The former French minister and his team arrived in London on Monday to continue informal conversations about the two parties’ future relationship. Barnier said that he had had a “useful discussion” with Mr Frost.
He added that they would “continue negotiating in good faith today” on Wednesday following a “nice dinner” in Number 10 last night. Talks continue in Whitehall this week.
Fishing, however, may remain a sticking point, with the EU wanting long-term assurances while the UK wants to regain full control of her waters once more, negotiating for a “zonal attachment” agreement which can be reviewed periodically.