Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The U.K. and EU flags stand ahead of a meeting between Britain's Brexit Secretary Stephen Barclay and the European Union's chief Brexit negotiator Michel Barnier in Brussels on Sept. 20, 2019.

POOL/AFP/Getty Images

The chances of Britain leaving the European Union without a trade deal have risen sharply as negotiations have been threatened by London’s insistence that it have full autonomy over its state aid plans, negotiators and diplomats said.

The United Kingdom left the EU on Jan. 31, turning its back after 47 years on the post-World War Two project that sought to build the ruined nations of Europe into a global power.

The British exit followed more than three years of wrangling over an exit deal since the 2016 referendum that sent shockwaves through global financial markets. Since Brexit, talks on a new trade deal have so far made little headway.

Story continues below advertisement

But fears in London, Brussels and other European capitals are mounting that a British exit without a trade deal could sow yet more economic chaos amid the turmoil of the coronavirus crisis which has hammered European economies.

“The chances for a deal, or a no-deal, are 50/50,” said one senior EU diplomat. “There has been absolutely no movement from the British side in the talks. If this approach doesn’t change quickly, we won’t be able to negotiate a deal in time.”

Failure to reach a trade deal could hammer financial markets as nearly a trillion dollars in trade, from car parts and medicines to lamb and fish, would be thrown into turmoil.

Sterling fell 0.6% to $1.3199.

A British source close to the negotiations said the European Union was slowing down negotiations and should understand that its demands on state aid and fishing were not compatible with Britain’s status as an independent country.

“We have also consistently tried to move discussions forwards but have been prevented from doing so by an EU which insists that everything must go at the pace of the most difficult issue,” the source said.

“Their ask that we accept continuity with EU state aid and fisheries policy is simply not compatible with our status as a fully independent country,” the source said.

Story continues below advertisement

Prime Minister Boris Johnson said if the EU was sensible, it would give Britain the Canada-style solution it is seeking. But that Britain was ready for any eventuality over Brexit.

European Council President Charles Michel told reporters: “Sooner or later, the UK should clarify what they want. It’s not possible to leave the European club and at the same time keep all the benefits.”

“We have no certainty that we’ll reach a deal. I hope it will be possible - but not at all cost,” he said.

BREXIT CRUNCH

The current sticking point is state aid.

The bloc’s Brexit negotiator Michel Barnier went to London on Tuesday to tell his UK counterpart, David Frost, that Britain must move on state aid, or there will not be an agreement, according to EU diplomats.

Afterwards, Barnier said London had not shown enough flexibility and creativity on fair competition, fisheries and solving disputes in order to seal a deal on new trade ties by a “strict deadline” of end-October.

Story continues below advertisement

“The Commission now worries the next negotiating round will end up with nothing,” the diplomat said. “If the UK doesn’t move a bit on the state aid thing, we have a problem.”

Britain does not want to allow Brussels authority over its state aid rules.

“The EU need to realise that what they’re asking for is at odds with what the British people voted for, twice, and not something we could accept,” the British source said.

Senior officials in British Prime Minister Boris Johnson’s office see only a 30%-40% chance that there will be a Brexit trade agreement due to the impasse, the Times reported.

“There is a risk of a no-deal scenario at the end of the year,” an EU official said. “People need to be ready for that.”

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies