EU prepared for worst-case scenario of no deal with UK – German minister

Talks between the UK and the European Union on a post-Brexit trade agreement are at a critical stage and the bloc is prepared for the “worst-case” no-deal scenario, a senior German minister has said.

Michael Roth, Angela Merkel’s Europe minister, said time was running out to conclude a deal and suggested the UK would have to give further ground on fishing rights, “level playing field” arrangements such as state subsidies, and the way any deal would be governed.

Boris Johnson’s Europe adviser Lord Frost is engaged in intensive negotiations ahead of Thursday’s summit of EU leaders, which the Prime Minister has set as a deadline for progress on a deal.

Lord Frost’s EU counterpart Michel Barnier updated ministers from across the bloc at a meeting in Luxembourg ahead of the leaders’ summit.

At the Luxembourg General Affairs Council (GAC) meeting, Mr Roth said: “Frankly speaking, we are at a very critical stage in the negotiations. We are extremely under pressure, time is running out.

“That’s why we expect substantial progress by our friends from the UK in key areas.”

Mr Roth added: “We are well-prepared for both scenarios, everybody should know that a no-deal scenario is the worst case, not just for the European Union but also for the United Kingdom, but we are also prepared for that.

“But we are working very hard on a good deal, on a sustainable deal which is acceptable for both sides.”

Mr Barnier suggested that talks would go on beyond Mr Johnson’s October 15 deadline.

“The EU will continue to work for a fair deal in the coming days and weeks,” he said.

European Commission vice-president Maros Sefcovic, who has been leading talks with Michael Gove on the implementation of the Brexit divorce deal, said there would be “full speed” in the final stages of the UK-EU talks.

After briefing ministers from the 27 member states on the state of the discussions with the UK, he said: “EU unity is solid. We continue: full attention, full speed in this final stage.”

In the UK, Government minister Lord Agnew warned that businesses were not ready for the changes that will come in on January 1 when the country leaves the single market and customs union.

He told the Treasury Select Committee: “There’s been a head-in-the-sand approach by traders which has been compounded by what I would call the quadruple-whammy of two false alarms – two extensions at the very last minute – then followed by Covid and now followed by the recession.

“The traders are not as ready as they should be.”