On Wednesday, German Chancellor Angela Merkel urged Brussels to prepare for no deal. As she set out plans for Germany’s six-month presidency in the European Parliament, Mrs Merkel said: “I will continue to push for a good solution, but we should also prepare for a possible no deal scenario. “Progress in negotiations so far has been slim, to put it diplomatically.”
She added: “We’ve agreed with the United Kingdom to accelerate the pace of talks to reach an agreement by autumn, an agreement that could be ratified by the end of the year.”
Her warning came as the UK’s chief negotiator, David Frost, and his EU counterpart Michel Barnier met in London last week.
Prime Minister Boris Johnson had said a deal could be reached this month with “new momentum” – but the talks ended once again with both sides citing “significant differences”.
European Commission spokesman Daniel Farrie said: “The EU is acting constructively and in good faith, as Michel Barnier pointed out earlier this week.
“We are working hard to overcome the significant divergences that remain between us.
“Meetings will continue in Brussels next week and the next round of negotiations will take place in the week of July 20 in London.”
Moreover, Mrs Merkel’s warning has been seen as an indication compromise cannot be reached and also, arguably, as a U-turn.
Unearthed reports reveal that German officials were already working on proposals for a “comprehensive free trade deal” between Britain and the EU in 2017.
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A throwback report by the Daily Express cited policy papers from the Chancellor’s Foreign Ministry in Berlin calling for a “balanced, ambitious and far-reaching” trade agreement to cover the UK’s future relationship with Brussels.
The leak suggested that pressure for a deal was building from the most powerful country in the EU, despite the apparent deadlock in the Brexit negotiations over the size of Britain’s “divorce” payment at the time.
Whitehall insiders described the signal of support for a “comprehensive free-trade accord” in Germany as a “positive development”.
The leaked document was a four-page draft position paper setting out the German government’s stance in the Brexit talks.
The document said: “We share the UK’s desire to secure a close partnership with the Union after its exit that covers economic and trade relations.”
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Since the 2016 EU referendum, German carmakers have been warning of fatal consequences if Britain leaves the bloc without a deal and have been urging lawmakers to redouble efforts to ensure tariff-free trade can continue.
Britain would suffer most if it lost free trade with European markets since 80 percent of vehicles assembled in the country are exported, mostly to the EU
However, for Germany the stakes are also high.
In 2016, Britain was the largest single export market for German manufacturers, who sold 800,000 new cars there, or 20 percent of their overall global exports.
German auto industry association VDA said after the vote: “The consequences of a ‘no deal’ would be fatal.
“Without an orderly and practical solution for business, jobs in the car industry, particularly on the British side, are on the line.”