The EU's chief negotiator implies key sticking points have been reduced to fishing rights and competition rules as talks resume in Brussels.
ADVERTISEMENTThe EU's chief negotiator Michel Barnier has said he still has the firm belief that a post-Brexit trade agreement is possible, as talks between the EU and the UK resumed in Brussels.
It comes a day after the UK and the EU kicked the latest deadline into touch to keep the seemingly interminable saga on life support -- and just two and a half weeks before the end of the transition period.
Speaking as he arrived to brief EU ambassadors on the state of play, Barnier implied the number of key issues blocking a deal had been reduced from three to two: fair competition rules and fishing rights.
"Two conditions are not met yet," he said. "This deal, it is still possible," he added. He did not mention legal mechanisms for resolving future disputes, another subject that has dogged the talks.
The tone from the British government was also more positive, in contrast to last week's message from Boris Johnson who said a no-deal outcome was a "strong possibility".
"The fact that we’re continuing to have these discussions shows that there is an opportunity to try and make some progress," said UK Business Secretary Alok Sharma. "Our intention is not to walk away. We will continue to talk as long as there is the possibility of reaching a deal."
Talks enter 'very last mile'
European Commission President said on Monday that negotiations were in "the very last mile". Opinions differed on whether there has been much substantive change.
"Not there yet. Still a way to go. Only positive is pointing in right direction," a source close to the talks told Euronews.
“I expect UK may double down on fish now. Whether that is backsliding, or just refusal to budge,” they added.
Speaking to Euronews, EU Financial Services Commissioner Mairead McGuinness struck a more optimistic note:
"We're in this phase now where at the very least and it is comforting, both the European Union and the United Kingdom are prepared to go the extra mile. So I think that's a better place than one week ago, but it doesn't diminish the amount of work that needs to be done to bridge the gap between the two sides."
Specifically, talks are thought to be focusing on a mechanism allowing either side to take action if it feels the other is gaining an unfair competitive advantage. The EU is concerned its businesses could be undercut by the UK as it diverges from European regulation.
'Brexit is madness!' says Le Maire
The UK stance was slammed on Monday morning by the French finance minister, who defended the firm line taken by France and the EU over future UK access to EU markets.
Bruno Le Maire admitted that his country's economy would be hit by a no-deal Brexit, but by "not very much".
"The big losers of Brexit will be the British. The nation which will emerge weakened by Brexit, is Great Britain," he told France Info. "Brexit is madness, political madness, economic madness, and historic madness."
The British people were paying the price of populism and of lies, he added.
"The British were led to believe that they could leave the European Union, but that they would continue to keep access to the European Single Market which is one of the richest on the planet. Well, no!"
Both President Macron and Ursula von der Leyen were right to remain steadfast, Le Maire said. "You cannot have your cake and eat it. You cannot say: 'I'm leaving, I'm independent, and at the same time I'll retain access to one of the richest markets on the planet', without respecting the environmental rules, without respecting social rules, without respecting the least of the rules of the single market."
ADVERTISEMENTBoth sides brace for holiday wrangling
The UK left the EU last January and the transition period expires on December 31. This will bring to an end the UK's membership of the EU's Single Market and Customs Union, bringing major changes to trading arrangements.
Disruption and extra costs will be exacerbated unless both sides reach agreement on the future relationship, adding a further layer of uncertainty to an already complicated situation.
Adding to the pressure are lengthening lorry queues at ports on both sides of the English Channel, as businesses scramble to stock up on supplies ahead of the new year. Last week the EU Commission published its transport contingency plans for a no-deal scenario.
With no new talks deadline in place, the prospect looms of the wrangling going on right into the holiday period.
The conventional ratification process has already been blown out of the water. Any deal needs to be approved by both the UK and European Parliament: the latter has pencilled in December 28 for an eventual debate.
ADVERTISEMENTMEPs have let it be known that they will not let time constraints impede the need for scrutiny of the text.
On the UK side, the dates for MPs' Christmas holiday period have yet to be published.
"Many of us are fully anticipating it’s entirely possible we might be returning to Parliament between Christmas and New Year to scrutinise this and vote it through if a deal is done," former government chief whip Mark Harper told the BBC on Sunday night.
UK and EU 'very far apart', says Johnson
"It is responsible at this point in time to go the extra mile," European Commission President Ursula von der Leyen announced on Sunday.
UK Prime Minister Boris Johnson meanwhile said the country would "certainly" not be "walking away from the talks" and that they should "continue to try" to find a deal.
ADVERTISEMENTJohnson repeated however that they "remain very far apart" on key issues and should prepare for trading on World Trade Organisation (WTO) terms without a deal.
"What we can’t do is compromise on that fundamental nature of what Brexit is all about which is us being able to control our laws, control our fisheries," said Johnson.
Although the British government continues to promote the idea of WTO terms as an "Australian-style" deal, the comparison is ridiculed by many trade experts. Australia has no deal with the EU, is far less reliant on Europe for trade than is the UK, and geographically is situated at the other end of the world.
WTO terms means trading under basic international rules, with obligatory tariffs and other trade barriers erected.