EU member states are wargaming strategies for no-deal Brexit, including the possible resumption of negotiations with the UK after the deadline passed.
One senior diplomatic source at an influential member state said that there was a risk that the two sides were too entrenched in their positions to get a deal before the deadline. While admitting that the schism would be painful, the senior diplomat said it could concentrate minds on both sides.
“We will have a period of chaos, but if we need to see how things evolve and how much it hurts before politicians come to their senses, then so be it,” the diplomat said.
“There is nothing that says that just because there is a no deal there can never be trade negotiations again,” the diplomat said.
“We could have a scenario where it will not work out in time, but sometime in the future.”
Another EU source insisted that there would be no resumption of trade negotiations with Brussels in the aftermath of no deal. Instead Britain would be forced to strike bilateral agreements with individual member countries to mitigate the economic impact.
The European Commission has pushed for a coordination role on those bilateral deals to ensure they do not harm other member states’ interests. Other sources said that eventually UK-EU trade negotiations would have to resume with the European Commission, which handles negotiations on behalf of the bloc, after no deal on January 1.
But they warned a chastened UK would be faced with exactly the same demands over the level playing field when they returned to the negotiating table. The only difference would be the UK would have less goodwill and leverage, they claimed.
Boris Johnson has said he will walk out of Brexit talks if a deal is not “in sight” by the EU summit on October 15, before the EU’s end-of-month deadline, but that threat is not taken seriously in Brussels.
The Prime Minister has promised to stay in regular contact with Ursula von der Leyen, the president of the European Commission, as negotiations hurtle towards the endgames.
Michel Barnier is expected to avoid getting drawn into the details of potential compromises at the European Council, especially over fishing rights, where the EU has softened from its initial negotiation position.
France and Denmark are particularly alert to any suggestion that their fishermen could suffer as a result of Brexit, which will be an inevitable consequence of any compromise on fishing rights.
Despite signs of movement towards a potential compromise on subsidy law, sources on both sides warned there are still significant gaps to bridge on the level playing field and the enforcement of the deal. Brussels sources said that if enough progress was made by Thursday, EU leaders could urge further intensified negotiations leading up to the end of October, which is the bloc’s deadline for the deal.
“Perhaps movement on two of the three areas will be enough for leaders,” the diplomat said, “but without governance being agreed in the end there won’t be a deal.”
Diplomatic sources also warned that the Brexit discussions could be relegated to nothing more than a stocktake on the state of play in talks. Leaders could also reiterate the importance of preparing for a no-deal exit at the end of the transition period on December 31.
“There is certain to be a demonstration of unity and support for Michel Barnier,” one diplomat said. Mr Barnier is expected to update Europe Ministers at their summit to prepare the groundwork for the summit on Tuesday.