MNI EXCLUSIVE: EU Open to Thin Brexit Deal To Avert Chaos

Brussels believes that even the current thin trade deal being negotiated by the European Union and the UK is still in the interest of both sides, according to a senior EU official close to the talks, with the EU increasingly resigned to having to spend years properly developing its economic and political relationship with its neighbour.

Officials in Brussels still favour the bare bones deal option over none at all, the source said. There will be trade friction with a minimal deal but the additional chaos brought by 'no deal' once the UK's transition period for departing the EU concludes at the end of this year is worth avoiding.

"It is beneficial for everyone to have an agreement and bad for everyone not to have an agreement," the source told MNI, even though the decision by UK Prime Minister Boris Johnson's government to backtrack on agreements over the Northern Irish border "has poisoned everything."

Despite concern about an unprecedented situation in the trade talks where "there is still so much technical work to do," the source said that – apart from the vexed issues of state aid and fisheries - "we have a pretty good understanding of what is possible."

PARED DOWN FTA

The EU official pointed out that the UK had already signalled in July that it was dropping many thorny issues from the talks which were key to smooth long-term EU-UK trading relations. These covered areas such as road haulage, aviation, energy, rules of origin and recognition of professional qualifications.

"We were clear (on all of the above issues) that is Single Market access, not FTA access," the source said.

"There will be a lot of friction for the UK and the EU even with a deal because the UK is no longer a member of the Single Market nor the Customs Union," the source continued. "No trade deal will just increase that friction."

ONE STEP BACK

At the same time, EU officials recognise that negotiations are likely to continue in the years ahead to try to forge agreements on many of the problem areas which are beyond the reach of a near-term agreement.

"At some point in the future you can improve that, say in three or five years' time…The relationship could evolve," the source said. But, for the moment, it is a question of retreating in order to advance in the future.

"We go from integration to total disintegration to another status quo, a minimum of the minimum, so any deal will be rushed through and there will be areas where we continue to talk," the source summed up. "Maybe when the UK is out and Brexit is done we can have a normal relationship, we can start talking about further things."

The source anticipated future talks even if the two sides part without a trade deal: "You can't rule out that the chaos gets so bad in the event of a no deal that both sides come back to the negotiating table and get something done."