Finansnyheder

Germany flags ‘high probability’ of no-deal Brexit

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The German government thinks that there is a “high probability” of a no-deal Brexit on October 31, since it is “inconceivable” that UK prime minister Boris Johnson will soften his tough position on the Irish backstop.

The assessment was made in an internal finance ministry document which underlines Berlin’s firm opposition to any renegotiation of the withdrawal agreement as demanded by the new British prime minister.

The document said Mr Johnson is expected to use the G7 summit in Biarritz at the end of August for a “big moment” to announce either a breakthrough or the breakdown of talks. Downing Street sources believe that Mr Johnson’s first appearance on the world stage will be critical to his Brexit strategy. 

“Against this backdrop it’s important from an EU perspective to stick to the line we have followed up till now,” the paper said. 

Mr Johnson has alarmed European leaders by insisting the backstop, aimed at preventing the return of a hard border in Ireland, must be scrapped. Unless the EU backs down, he has said the UK will leave the bloc by October 31, with or without a deal. The prime minister has not indicated he would be willing to accept any tweaks or a time limit to the insurance policy.

The fact that Mr Johnson has not visited any European capitals since becoming prime minister is also being interpreted by many in the EU of a sign of his determination to steer towards a no-deal Brexit. Some MPs in Westminster believe he is preparing for a blame game, where he will pin a no-deal on the EU.

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So far, the EU has insisted it will not remove the backstop and reopen the withdrawal agreement negotiated between the Commission and the government of Theresa May. German finance ministry officials said that even if the backstop is removed, as Mr Johnson wants, there is no certainty that the UK parliament will back the deal, which MPs have already rejected three times. 

The document, whose contents were first reported by Handelsblatt and confirmed by the FT, said it was “crucial” that all EU member states remain united in their support for the withdrawal agreement, and not “lose their nerve”, even if faced with the looming prospect of a disorderly Brexit.

The insight into Berlin’s position came on the same day that Sajid Javid, the UK chancellor, flew to Berlin for talks with his German counterpart Olaf Scholz. Mr Javid is the first senior member of the Johnson cabinet to hold talks on Brexit with a counterpart from an EU member state.

Mr Scholz later tweeted that the two had discussed Brexit and “future co-operation”. “The EU27 stands united and is ready for all scenarios,” he said. “The best and only way for an orderly withdrawal is the negotiated #Brexitdeal.”

The finance ministry paper said Germany’s preparations for a no-deal scenario were already “largely completed”. The EU Commission was, it said, not planning any “emergency measures”, and the preparations made up till now required no change. 

Germany has already passed more than 50 laws and other measures to prepare for the eventuality of a no-deal Brexit. These include a recent agreement between BaFin, the German financial watchdog, and its British equivalent the FCA on cross-border financial services. Berlin has also hired 900 more customs officials to deal with what it expects to be much more time-consuming clearance procedures.

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Via Financial Times

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