Yesterday, Britain and the EU resumed talks over their future relationship after a six-week interruption caused by coronavirus. Shortly after their first meeting in early March, the EU’s chief Brexit negotiator Michel Barnier and his British counterpart David Frost were forced into isolation after showing symptoms of the disease. There are another two virtual rounds of talks planned before the July deadline for Britain to request an extension of up to two years.
Mr Frost, though, has already told Mr Barnier in a call last week that the UK would never ask for an extension.
He claimed that if the EU was to request a delay to the end of the transition period, which effectively deep freezes the UK’s membership of the single market and customs union after Brexit, Britain would refuse because it is not in the “national interest”.
This is despite the Scottish Government and UK businesses, who are fearful of the economic disruption of Brexit and the coronavirus combined, urging Number 10 to call for extra time.
A source close to the Prime Minister‘s chief adviser Dominic Cummings told The Times on Saturday that there is already a view in Number 10 that the UK is heading for “no deal”.
Moreover, the divides between both sides over the free trade agreement remain deep.
Brexit analysis: Why Boris Johnson now has upper hand in EU trade talks
Britain’s chief Brexit negotiator David Frost and his EU counterpart David Frost
The UK wants a Canada-style trade deal, which removes most tariffs but would allow Britain to diverge from EU rules, and a separate fisheries deal, with catches negotiated on an annual basis.
Brussels is pushing for an umbrella agreement that would encompass a zero tariff on goods trade deal, a status quo fishing deal, and security and foreign policy cooperation.
However, as tensions are set to rise in the upcoming months, a tweet published by Ukip founder and emeritus Professor at London School of Economics (LSE) Alan Sked suggests Prime Minister Boris Johnson might actually have the upper hand in these negotiations.
Yesterday, Mr Sked tweeted: “Ireland is in severe recession with an unemployment rate of 22 percent.
“Let’s hope it doesn’t force a no deal Brexit.”
The Professor’s tweet highlights a wider picture in the eurozone.
The euro area was already in a weak state before the impact of coronavirus.
Eurozone real GDP increased just 0.1 percent quarter on quarter and one percent year on year in the fourth quarter of 2019, resulting in its weakest performance in six years.
Prime Minister Boris Johnson
Germany’s output was flat, while Italy and France suffered contractions.
This month, the eurozone economy suffered the biggest falls in employment and activity on record.
The IHS Markit composite purchasing managers’ index (PMI) – a closely watched gauge of activity – collapsed to 13.5, the lowest score since records began over two decades ago.
The reading was well below last month’s score of 29.7, which was itself a record low.
A score of under 50 indicates contraction.
The lowest score seen during the financial crisis was 36.2.
While Britain’s economy is also suffering the damages of the spreading virus, it does have an advantage.
In an interview on Sky News last month, the former Governor of the Bank of England Lord Mervyn King explained: “What we can take comfort from here I think is that the Bank of England and the Government are working very closely together.
“I think you can see that around the world nations are responding to this. People have to accept that tremendous sacrifices are made for other people. And the community in which we do that most naturally is the nation state.
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Italian MEP Antonio Maria Rinaldi and Brexit Party leader Nigel Farage
“That is not something they have created in the euro area. They failed to create a fiscal union.
“Now, someone will hope that the crisis we are facing will lead them to do that but they have not got the political legitimacy to do that.
“We should be really grateful that we are not in the euro area and that we can coordinate our responses directly between the Central Bank and Government here in Britain.”
It can, therefore, be argued that in the negotiations, Britain could have the upper hand with its ‘no deal threat’, resulting in Brussels caving in to the UK demands.
According to Italian MEP Antonio Maria Rinaldi, the pandemic “could actually accelerate the Brexit talks”.
He said: “The longer the transition period is, the worse is for the EU.
“Let’s be clear.
“The UK did not leave Europe, it left the EU, which is just a series of agreements.
“And agreements have been signed and rejected since the days of the Babylonians.
“The UK, with its strength and ability and with its power, will certainly manage to find bilateral and plurilateral agreements.
“It has always done so, but not only that, the UK has the upper hand in these negotiations.
“If the EU does not make any concessions it is like saying ‘I am a customer, I am going to buy a pair of shoes and the owner of the shop starts slapping me in the face’.”
Published at Thu, 23 Apr 2020 08:13:00 +0000