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Merkel warns that the EU must prepare for No Deal Brexit

Merkel warns that the EU must prepare for No Deal Brexit after Boris’s vow that Britain WILL walk away at end of year

  • London and Brussels have until the end of 2020 to clinch a new Brexit agreement
  • She made the comments as Germany took over the bloc’s rotating presidency
  • This week the EU and Britain resumed negotiations, but the tone has hardened 

Angela Merkel has warned that the EU must prepare for the possibility of a No Deal Brexit and the chance that their post-Brexit relationship could fail. 

The Chancellor made the comments as Germany took the helm of the bloc’s rotating presidency after months of standstill because of coronavirus.

This week the EU and Britain resumed negotiations on how to define Britain’s future economic ties with the bloc, but the tone has hardened in both camps.

Prime Minister Boris Johnson has insisted there is no chance of extending the Brexit transition period beyond the end of December, despite jibes from Brussels that the UK cannot afford another hit after the pandemic. 

Merkel already warned last week that Britain would ‘have to live with the consequences’ of weaker trade ties with the EU in a no-deal outcome

Merkel already warned last week that Britain would ‘have to live with the consequences’ of weaker trade ties with the EU in a no-deal outcome. 

‘I will keep pushing for a good solution, but the EU and Germany too must and should prepare for the case that an agreement is not reached,’ Merkel told German lawmakers in Berlin today. 

The veteran leader was speaking on the first day of Germany’s six-month EU presidency, set to be dominated by the coronavirus pandemic and its economic fallout. 

London and Brussels only have until the end of December to clinch a new Brexit agreement or end their half-century relationship without specific plans for how they plan to trade or coexist in other fields.

Without a deal, ties would be reduced to minimum standards set by the World Trade Organization with high tariffs and serious disruptions to business.   

Boris Johnson has insisted there is no chance of extending the Brexit transition period beyond the end of December, despite jibes from Brussels that the UK cannot afford another hit after the pandemic

The main sticking points are over rights to access UK fishing waters, and whether Britain must comply with the bloc’s state aid rules and environmental, social and labour standards in return for a free trade deal. 

Germany has set itself an ambitious agenda for the EU presidency, which observers say may be the last chance for outgoing chancellor Merkel to shape her European legacy.

Her main goal is to push through a massive economic recovery plan to help the 27-member club cope with its steepest recession since World War II, triggered by a pandemic that has so far killed more than 500,000 people worldwide.

‘We are living in very serious times and need to react accordingly,’ Merkel told German MPs.

Brexit negotiator David Frost (pictured left) and Michel Barnier met face-to-face for the first time since March on Monday, as they tried to thrash out differences on fishing rights and demands to obey the bloc’s rules

The chancellor, who has just over a year left in her final term, has thrown her political weight behind the proposed 750-billion-euro ($843-billion) recovery fund.

The fund would controversially be financed through shared EU borrowing, in a stunning U-turn for Germany after years of opposition to debt pooling.

‘An extraordinary situation requires a special solution,’ said Merkel.

The first big test of Germany’s EU custodianship will come at a July 17-18 EU summit, where Merkel hopes leaders will reach an agreement on the recovery fund.

The money is expected to come mainly in the form of grants for countries hit hardest by the pandemic, such as debt-laden Italy and Spain.

But so-called frugal nations including Austria and the Netherlands want to rein in the spending and are insisting on loans rather than grants.

Merkel has urged holdout nations to show unprecedented solidarity with hard-hit neighbours, warning that an uneven recovery could undermine the EU single market and end up harming stronger economies too.

But ‘member states’ positions are still very far apart’ on the matter, she admitted.

If accepted, the rescue fund would be a milestone for EU unity.

It would also be a big win for Berlin, and could ease some of the lingering resentment from the eurozone debt crisis a decade ago when Merkel’s government insisted on harsh austerity for struggling nations like Greece. 

German Foreign Minister Heiko Maas (left) takes over the rotating European Union presidency of the 27-member bloc from Croatian Foreign Minister Gordan Grlic-Radman during a symbolic handover in front of the Brandenburg Gate in Berlin on 1 July 

Merkel has stressed the need for the bloc to prepare for the post-pandemic future, including through a more unified approach to health issues and by investing in climate-friendly projects.

Environmental demonstrators gathered outside the chancellery Wednesday with bags of fake euro banknotes to demand that any coronavirus stimulus be spent on ‘a green and just future’.

At a Berlin press conference, Economy Minister Peter Altmaier said Germany supported the bloc’s goal to become carbon neutral by 2050.

He also said Germany would use its EU presidency to push for ‘more robust’ supply chains within the EU after the virus outbreak left member states scrambling to secure protective gear mainly made in China.

Berlin would fight to make progress ‘as quickly as possible’ on a EU-China investment agreement aimed at levelling the playing field, he said. 

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Angela Merkel prepared to extend Brexit talks to November to negotiate last gasp trade deal with Boris Johnson

ANGELA Merkel is prepared to take Brexit talks to the wire in November to clinch a last gasp trade deal with Boris Johnson.

The German Chancellor believes negotiations can go as late as Bonfire Night and still leave enough time to have the FTA in place for the end of the year.

But she will warn the PM she can't broker a deal between him and other EU leaders unless he takes a "less ideological and more pragmatic" approach.

A senior German diplomat said: "So far negotiations have been treading water. There’s the possibility to extend until the end of October, maybe go into the beginning of November, but this is really it."

No 10 has insisted talks must be done by the end of September to give businesses enough time to prepare.

Mrs Merkel believes she can "moderate" between the two sides to get a deal but "the UK needs to take a more realistic approach". A source close to the Chancellor said: "It takes two to tango. It's not just our willingness."

The revelations came as Michel Barnier slammed Britain's "unacceptable" demands on financial services in a speech to bankers.

Addressing a think tank he fumed: "The UK is trying to keep as many Single Market benefits as it can. It would like to make it easy to continue to run EU businesses from London, with minimal operations and staff on the continent."

He added a decision on "equivalence" so British banks can carry on trading with the continent has been delayed by the UK failing to return paperwork.

But British officials blamed Brussels for sending over more than a thousand pages of questions, many of which are irrelevant.

Meanwhile, it has emerged that UK companies exporting to the EU will have to wait for permission from the taxman to move goods across the Channel.

Firms will need an electronic customs authorisation from the Goods Vehicle Movement Service – an new and untested IT service – before departure.

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