The first round of serious negotiations have broken up in Brussels with a press conference where, as you might expect, both sides said they had made progress but they also made clear there remained fundamental differences and a lot of work remained. The various outlets carried the news in more or less the same way, viz:
The Telegraph: EU's top Brexit negotiator warns David Davis UK must agree to pay 'divorce bill' for talks to progress
The Guardian: EU calls on UK to urgently make offer on divorce bill
The Independent: Brexit: Second round of talks fails to produce breakthrough on key disputes, says EU’s chief negotiator
No doubt over the next few days we will get some idea of what both sides actually thought about it rather than the usual anodyne stuff put out in the press conference. What is clear is there is some irritation on the part of the EU at the lack of progress on the exit bill. Michel Barnier put out a position paper on the EU's thoughts and expected us to do the same. But we haven't and all we do is try to pick holes in the EU's paper. Perhaps Davis thinks this is clever but unless we give some more concrete proposals about what we think the settlement should be, the EU will halt the talks but the clock will continue to tick.
Mr Barnier said the EU would not give way on its insistence that the rights of citizens should be guaranteed by the European Court of Justice – a red line for the UK.
I think we are seeing a testing of each side by the other. The EU is trying to show they have the whip hand. We want to demonstrate we are not in a weak position - when in reality we are. Who will give way first? I wouldn't put money on the EU backing down. The Guardian has set out the main dividing lines HERE.
Anyone in any doubt what might happen in the event we do not reach a deal might be interested in this report (HERE) by The UK in a Changing Europe. The conclusion is this:
So – to answer the original question – “no deal” doesn’t mean the country would come to a stop. But even under relatively benign conditions and with time to prepare, the impacts would be widespread, damaging and pervasive. It is not possible ex ante to quantify the economic impacts, but it is reasonably clear that they will be comparable to some of worst-case scenarios presented before the referendum. This time, Project Fear would not be scaremongering.
Anyone in any doubt what might happen in the event we do not reach a deal might be interested in this report (HERE) by The UK in a Changing Europe. The conclusion is this:
So – to answer the original question – “no deal” doesn’t mean the country would come to a stop. But even under relatively benign conditions and with time to prepare, the impacts would be widespread, damaging and pervasive. It is not possible ex ante to quantify the economic impacts, but it is reasonably clear that they will be comparable to some of worst-case scenarios presented before the referendum. This time, Project Fear would not be scaremongering.
