Johnson and EU’s Von der Leyen Prepare for Crunch Brexit Call

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Dec 05 2020, 1:13 AMDec 05 2020, 2:07 AMDecember 05 2020, 1:13 AMDecember 05 2020, 2:07 AM

(Bloomberg) -- U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen will hold a crisis call on Saturday in an effort to salvage a post-Brexit trade deal after talks broke up in deadlock.

Both chief negotiators said in tweets on Friday they have paused deliberations because the “conditions for an agreement are not met” and will now brief their respective political leaders. They warned of “significant divergences” on the three main disagreements that have dogged the talks since they began in March.

Negotiators are now bracing for a crisis weekend as they try to reach an accord after a fight between Britain and France scuppered an agreement that had been coming into sight earlier in the week. U.K. officials said the EU suddenly turned up with a new set of demands on Thursday, something their Brussels counterparts denied.

The U.K. blamed France for hardening the EU’s demands. On Friday, the country’s European affairs minister, Clement Beaune, reiterated his government will veto any deal if it isn’t in its national interest.

EU negotiators suspect the U.K. is seeking a moment of crisis and they are bracing for the tone of the talks to get worse before an agreement is reached, according to an official from the bloc who spoke on condition of anonymity because the discussions are private.

The two sides hadn’t been far away from a deal, but the U.K. is slowing the process down, the official said. Earlier, a British official had said that, despite the setback, an accord was still possible in coming days.

If a deal isn’t reached, businesses and consumers will be left facing the cost and disruption of tariffs and quotas, while relations between the U.K. and EU risk being poisoned for a generation.

The EU’s chief negotiator, Michel Barnier, is expected to return to Brussels on Saturday before briefing ambassadors from the bloc’s 27 member states the following day, according to a Brussels official.

The two sides haven’t yet reached agreement on three key issues: access to British fishing waters, the competitive level playing field for business, and how any overall agreement is enforced.

French President Emmanuel Macron is determined his fishing industry won’t lose a big part of its access to British waters and wants U.K. businesses to be tied to strict rules on state aid and labor standards so they don’t have what he sees as an unfair advantage.

“If there is a deal which is not good,” Beaune told Europe 1 radio, “then we would oppose it. We always said so.”

German Chancellor Angela Merkel, who has taken a softer line than her French counterpart, called for both the U.K. and EU to make concessions.

“For the chancellor, and that hasn’t changed in recent weeks, the willingness to compromise is needed on both sides,” government spokesman Steffen Seibert said. “There are red lines, that’s clear, but there is always room for compromise.”