Brexit: EU prepares for no-deal as sides remain 'far apart' and Sunday talks deadline set

The European Union will imminently roll out preparations for a no-deal Brexit, The Irish Times understands, after talks between British prime minister Boris Johnson and European Commission president Ursula von der Leyen failed to overcome deep differences between the two sides.

The two met over dinner in Brussels last night in what was seen by both sides as a final chance to persuade the other to back down from red lines that have prevented the EU reaching a trade deal with its former member to avoid punishing tariffs coming into force on January 1st.

The negotiating teams are to meet for discussions today and Friday but the two sides are “far apart”, Ms von der Leyen said in a statement, and both sides agreed to end talks on Sunday if no breakthrough can be found.

"We had a lively and interesting discussion on the state of play across the list of outstanding issues," she said.

"We gained a clear understanding of each other’s positions. They remain far apart.

“We agreed that the teams should immediately reconvene to try to resolve these essential issues.

“We will come to a decision by the end of the weekend,” her statement concluded.

“Very large gaps remain between the two sides and it is still unclear whether these can be bridged,” a Downing Street source said.

UK prime minister Boris Johnson and European Commission president Ursula von der Leyen meet for talks. Photograph: Aaron Chown/WPA Pool/Getty

With just over three weeks remaining before the end of the year when any agreement would need to come into force, the European Commission has prepared legal texts for a no-deal scenario and may publish them within hours, two diplomats said.

“With the evolution of the last days, the issue of contingency planning has jumped up the ladder of issues,” an EU diplomat noted. “I would not be surprised to find these on the table in the next 24 hours given the urgency.”

The contingency measures are described as the bare minimum required to avoid the worst chaos that would otherwise ensue on January 1st when existing arrangements would dissolve overnight. They will include temporary rules to allow aeroplanes to continue to fly between the UK and the EU, and for haulage trucks to keep driving through the Channel Tunnel, The Irish Times understands.

It came as Mr Johnson met with European Commission president Ursula von der Leyen in Brussels for a dinner seen by both sides as a last chance to persuade the other to move their red lines.

Single market

The primary stumbling block is that London wants the power to autonomously set its own rules, while the EU insists that British companies cannot have barrier-free access to its single market unless they follow comparable standards to their EU counterparts.

Speaking in the House of Commons before he left for Brussels, Mr Johnson said a good deal was still there to be done but said he would not accept that the EU could impose automatic trade sanctions if Britain were to shift from shared rules.

“Our friends in the EU are currently insisting that, if they pass a new law in the future with which we in this country do not comply or do not follow suit, they should have the automatic right to punish us and to retaliate ... I do not believe that those are terms that any prime minister of this country should accept,” Mr Johnson said, to cheers in parliament.

Earlier, German chancellor Angela Merkel told the Bundestag that there was still a chance of a deal, but it was possible one could not be reached.

“If there are conditions coming from the British side which we cannot accept, then we will go on our own way without an exit agreement,” she said. “Because one thing is certain: the integrity of the single market has to be maintained.”

‘On the precipice’

Taoiseach Micheál Martin, who travelled to Brussels last night for today’s summit, will discuss no-deal preparations with EU leaders this afternoon. Senior Irish Government sources were playing down the significance of the dinner last night but Mr Martin yesterday told the Dáil “we are on the precipice of a no-deal”.

It remains Dublin’s view that Mr Johnson wants to conclude a deal, though senior figures question if he has the political will and capacity to make the moves required to achieve it.

One person familiar with the Irish Government position remarked: “The talks aren’t dead anyway - but they are on a ventilator.”

Some member states have been calling for the contingency plans to be published for months. But the commission had been reluctant to release the texts while negotiations were ongoing, for fear of giving a negative signal about the outcome or even smoothing the path towards a no-deal by removing some of the downsides.

National leaders of the 27 EU member states who are set to meet in Brussels on Thursday may be briefed by von der Leyen on her meeting with Mr Johnson.

But diplomats said they did not expect to discuss any changes to their position.

“We have been clear all along that we have our red lines when it comes to the level playing field,” a second diplomat said. “That has been our baseline since the day after the referendum, and that of course will not change, and cannot change.”