The German Chancellor, who currently holds the six-month rotating presidency of the EU council, has removed Brexit from the agenda ahead of a meeting of EU ambassadors on September 2. One EU diplomat said: “Since there hasn’t been any tangible progress in EU-UK negotiations, the Brexit item was taken off the agenda.”
The shock decision by Ms Merkel, who has built a reputation in Brussels as a dealmaker, is the clearest indication there will no trade deal between the UK and the EU before the December 31 deadline.
Ms Merkel, 66, held discussions with French President Emmanuel Macron at his official residence last week.
The two European leaders were influential in brokering the historic £750 million coronavirus bailout package for the bloc, but according to one diplomat it is unlikely either would be able to break the current Brexit impasse.
An EU official told the Guardian: “Over the recent month’s Franco-German cooperation has gained new traction.
“Given this new reality it would be futile to wait for a white knight from Paris or Berlin to come to the rescue.”
Sandro Gozi, Italian MEP and former Europe Minister, also thought Ms Merkel and Mr Macron would be powerless to change the course of Brexit discussions and insisted a no deal outcome is growing ever closer.
Mr Gozi said: “I doubt even Merkel or Macron would be able to transform a stalemate into a positive outcome.
“I have always thought, that is my personal position, that no deal was a real option especially on London’s side.
“Every day that passes without concrete progress is a day closer to no deal Brexit.”
Brexit negotiator Michel Barnier said a trade deal “seems unlikely” following the conclusion of the seventh round of talks last Friday.
Outstanding issues over a level-playing field on trade, fisheries and state aid remained on the table.
The eighth-round of Brexit talks are not due to formally start until September 7, however this evening, an eager Mr Barnier has insisted discussions could begin earlier.
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In a statement, Mr Frost said: “The EU is still insisting not only that we must accept continuity with EU state aid and fisheries policy, but also that this must be agreed before any further substantive work can be done in any other area of the negotiation, including on legal texts.
“This makes it unnecessarily difficult to make progress.
“There are other significant areas which remain to be resolved and, even where there is a broad understanding between negotiators, there is a lot of detail to work through.
“Time is short for both sides.”