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To avoid this scenario and salvage the talks, there are a few things both parties need to realise:
Britain can’t Brexit without help from the EU. The debate in Britain about options for the future continues to be lamentably vague and ill-informed. Despite the UK’s government positions papers of earlier this year, it seems no one in the UK is ready to answer detailed questions about the nature of a prospective association agreement.
The EU27 will have a lot of thinking to do. The options are limited; none are simple; all have implications for relations with third countries; and all will involve the UK in on-going institutional and budgetary relations with the EU. Meanwhile, it is wrong to characterise the second phase of the Brexit negotiations as being the commencement of trade talks, which will only come later once the UK’s future location has been identified and agreed. The length of the transition period should be set at a minimum of two years on a renewable basis until such time as the new association agreement, with robust governance structures, enters into force.
Michel Barnier needs a new mandate to allow for meaningful transition talks. As things stand, Phase II of Mr Barnier’s mandate will allow him merely to engage in “preliminary and preparatory discussions” in order to ascertain an “overall understanding” of the future relationship. However, in light of the predicament into which the talks are now plunged, that mandate is inadequate. In December the European Council should supplement its old guidelines with a firm decision to design arrangements for a transition towards a future association agreement.