EU prepares to declare no-deal Brexit a ‘disaster’

The European Commission will call for the release of nearly €600 million on Wednesday from an emergency fund for storms and earthquakes as it declares Brexit could be a "disaster".

The commission will propose dipping into a solidarity fund created in 2002 to help member states deal with major natural disasters, such as floods, storms, volcanic eruptions and forest fires.

Brexit is a “singular event” that “could constitute a major disaster and therefore the activation of the solidarity principle, which is the core of the [fund], would be justified” states a copy of the proposal.

Further money will also be available from the European Union’s “globalisation adjustment fund”, intended to support workers who lose their jobs when factories go bust. If the United Kingdom crashes out without a deal on October 31st, there will be a “significant impact on trade patterns, growth and jobs”, states the document.

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Member states from the 27 governments will have to approve the revised spending plans before the end of October.

The proposal highlights the contrast between the preparations being made by the EU and those of the UK government, which has been criticised for underplaying the likely economic damage caused by no deal.

The Government has already been promised extra cash if the UK crashes out without a deal. The Republic’s central bank warned this year that a no-deal Brexit could result in 34,000 fewer jobs by the end of next year and more than 100,000 over the medium term.

But countries including Belgium, Netherlands, Germany, Denmark and Spain will also face severe challenges in the parts of their economy most reliant on British trade.

On Monday Austria foreign minister Alexander Schallenberg said the bloc would keep open the possibility of an extension to the UK’s membership beyond October 31st.

Mr Schallenberg said: “Of course our thread of patience doesn’t go on forever. But in the past two years, we have put in a lot of energy to make an orderly exit possible. Secondly, a disorderly exit would have many consequences that we can not foresee in its entirety when it comes to financial flows and services.”

As the so-called “rebel alliance” in the Commons prepared to try to force British prime minister Boris Johnson to request an extension rather than crash out on Halloween, Mr Schallenberg said the EU would not pre-empt Downing Street by making an offer.

Mr Johnson’s chief EU adviser, David Frost, is expected in Brussels on Wednesday and Friday. The prime minister is insisting that the EU removes the Irish backstop from the withdrawal agreement but the UK government is yet to offer any alternative plan for avoiding a hard border.

The prime minister has instead claimed that the British government will not pay its £39 billion divorce bill unless a new deal is negotiated and ratified.

The EU responded that such move would stymie any hope of talks on a free-trade deal in the foreseeable future.

Mr Schallenberg said: “We expect – and I underline this in triplicate – that the United Kingdom will fully meet its financial obligations as a member, whether or not there is a hard Brexit. The UK will also have to consider what kind of signal that would be for future contractors outside the EU if it ignores its obligations as soon as things get tough.” – Guardian