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The European Commission on Wednesday will tell business to “take advantage of the extra time” to prepare following EU leaders’ decision this year to delay Britain’s departure.
According to a paper seen by the Financial Times, Brussels will say that changes to EU law and other “contingency measures” it has taken over recent months would only “mitigate the most serious disruptions of a withdrawal without an agreement”.
Brussels’ faith in prospects for a negotiated Brexit has dwindled amid the insistence of Boris Johnson and other Conservative party leadership contenders that they would accept a no-deal exit if the EU refused to renegotiate the conditions of Britain’s withdrawal.
Such rhetoric is expected to rise as the leadership campaign gathers pace and candidates try to reassure party activists shocked by the rise of Nigel Farage’s Brexit party.
The commission told a closed-door meeting of national officials last week that the probability of a no-deal exit had increased given the announcements made in the Tory leadership contest.
There is also tension in the EU about how much longer the Brexit saga should be allowed to go on. France’s Emmanuel Macron has taken a sharply different line from the likes of Donald Tusk, president of the European Council, and German chancellor Angela Merkel, by insisting that the UK cannot count on further extensions.
The commission paper warns that a no-deal Brexit “would have a serious negative economic impact, and that this impact would be proportionately much greater in the United Kingdom than in the EU27 member states”.
It cites financial services as a sector where “residual issues remain” in preparing for the practical consequences of the UK’s departure, with EU insurers and payment service providers among those still needing to make new arrangements to preserve client relationships.
[...]EU officials have underlined that going too far would, in effect, grant Britain the benefits of a Brexit deal by the backdoor, while also encouraging complacency among companies.
Brussels has made 19 legal proposals to limit short-term disruption to everything from aircraft landing rights to derivatives trading, and the vast majority of the measures have already been signed off by national governments and MEPs.
“The commission does not plan any new measures ahead of the new withdrawal date,” the paper said. But it leaves open the possibility that some of their expiry dates might shift depending on “political developments”, which is code for further Brexit delays. [...]
Full article on Financial Times (subscription required)