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As clock ticks, EU and UK tell each other to budge on Brexit

Guy Faulconbridge and Gabriela Baczynska
·3-min read
The weekly cabinet meeting in London
The weekly cabinet meeting in London

By Guy Faulconbridge and Gabriela Baczynska

LONDON/BRUSSELS (Reuters) - A frustrated European Union and piqued Britain both said on Tuesday that the other needed to compromise to avoid a fast-approaching disruptive finale to the five-year Brexit drama that would add to economic pain from the coronavirus crisis.

Failure to clinch a trade deal when Britain leaves a standstill transition period on Dec. 31 would sow chaos through supply chains and undermine Europe's economy as it already sees jobs and businesses pulverised by the COVID-19 disease.

After an EU demand for concessions, Prime Minister Boris Johnson broke off talks and said it was time to prepare for a no-deal Brexit.

The EU has since offered to intensify talks and open discussions on legal texts of a draft deal, though Britain maintains there is no basis to resume discussions without a fundamental change in approach.

"We stay ready to negotiate," European Commission spokesman Eric Mamer told a daily news conference in Brussels. "In order to come to an agreement, both sides need to meet."

Michel Barnier and David Frost, the EU and British chief negotiators, were due to speak by telephone on Tuesday.

"What the UK's chief negotiator needs to see is a clear assurance from the EU that it has made a fundamental change in approach to the talks and that this is going to be a genuine negotiation rather than one side being expected to make all of the moves," a spokesman for Johnson told reporters.

EU diplomats cast Britain's moves as bluster and a frantic bid to secure concessions before a last-minute deal.

"If they want to get back to the negotiating table, they can," said one EU diplomat. "If they want to jump – we won't be able to stop them."

'POSTURING'

"All this posturing is only aimed at strengthening Johnson's hand. If they don't want to talk, that's their choice. There is no point at this stage to give them anything more," said another EU diplomat.

There is concern in some European capitals that Johnson may judge that the domestic political benefits and potentially the long-term economic freedom of a noisy no-deal exit outweigh the benefits of a shallow trade deal.

Britain formally left the EU at the end of January, but the two sides have been haggling over a deal that would govern $900 billion in trade including everything from car parts to medicines.

"The EU have effectively ended those negotiations," Johnson told Greek Prime Minister Kyriakos Mitsotakis, according to a Downing Street spokesman. "Should the EU fundamentally change their position, then the UK would be willing to talk."

Johnson and his Brexit supremo Michael Gove will tell businesses on a video call on Tuesday to step up preparations for the end of the transition period.

Failure to strike a deal with the EU would be "extremely damaging" and cut profits by up to a quarter at carmaker Bentley, its boss told Reuters, as the government urges firms to plan for potential disruption.

(Reporting by Guy Faulconbridge, Elizabeth Piper, Michael Holden and Costas Pitas in London; Editing by Andrew Cawthorne and Alex Richardson)