No deal Brexit fears send pound plummeting as UK warned: you have the most to lose

Published: 7 December 2020

Post Desk : The pound fell sharply this morning after the European Union’s top negotiator Michel Barnier issued a “very downbeat” assessment of the chances of a Brexit deal.

His gloom-laden private breakfast briefing to EU ambassadors in Brussels seemed calculated to stoke fears of a no-deal outcome — and sterling dipped by 1.15 per cent against the euro within minutes. An EU diplomat said: “We are at the make-it-or-break-it moment.”

EU politicians sought to unnerve the British side with warnings of severe economic disruption from January 1, when the transition period expires.

“We all know the country that suffers the most in a no-deal scenario. It’s not Ireland, it’s not one of the EU member states, it is the UK,” said Irish MP Neale Richmond, a member of Leo Varadkar’s Fine Gael party.

French MP Bruno Bonnell, a member of Emmanuel Macron’s En Marche! party, said Britain could be out in the cold. “It’s like a divorce: You don’t stay in the same house, you don’t use the same devices,” he said.

t came as:

Talks restarted this morning after Mr Barnier’s briefing, with the focus on “level playing field” rules and fishing rights, the thorniest problems. “No significant progress” was made overnight, UK sources said.
Cabinet Office minister Michael Gove dashed over to Brussels for talks with the EU vice-president in what looked like an attempt to broker a way past the roadblock. His officials insisted it was a planned meeting only concerning the Irish border issue.

Irish foreign minister Simon Coveney said negotiations “seemed stalled” He told Irish radio station RTE: “Having heard from Michel Barnier this morning, really the news is very downbeat. I would say he is very gloomy, and obviously very cautious about the ability to make progress today.”

British minister James Cleverly said the Government would reinsert clauses that break international law into the Internal Markets Bill this afternoon. The clauses, which overwrite the Withdrawal Agreement, were removed by the House of Lords last month.
Mr Coveney said reports of a fishing breakthrough were “absolutely not the case” and the outstanding issues were “very problematic”.

An EU diplomat said: “Barnier and Frost negotiated intensively… and made some progress but have not quite managed to bridge differences. There has been no decisive progress, though some progress has been made.”

The EU wants “robust and enforceable” rules to protect its single market from unfair competition, which Britain fears would tie the UK to EU rules forever. The EU also wants “stable access to UK waters” for its fishing trawlers, which Britain sees as giving away sovereignty.

However, British MPs said it was typical EU negotiating tactics to try to put the squeeze on by raising last-minute fears of a breakdown in talks.

Mr Cleverly tried to calm nerves by saying a no-deal Brexit would not be “Armageddon” and that trade could continue “perfectly well” on World Trade Organisation terms.

Sounding more upbeat than UK officials in Brussels, he said a trade deal was “nearly there” but that negotiators might miss the December 31 deadline to get it passed.

He told Radio 4’s Today programme: “The vast majority of the elements of this agreement have been resolved and we’re now hanging on a small number of important areas where we don’t have agreement. We’re nearly there but we are not quite there yet.

“And it may well be that we will not be able to resolve this in the timescale we’ve got, but we’re nearly there.”