U.K. Says Talks Could Collapse in Next Few Hours: Brexit Update

(Bloomberg) -- A British official warned that talks over a future trade deal with the European Union could collapse on Monday unless negotiators make progress in the next few hours.

Prime Minister Boris Johnson is due to speak to European Commission President Ursula von der Leyen on Monday evening and that conversation will be a make-or-break moment, another U.K. official said.

At a briefing in Brussels on Monday, Michel Barnier, the European Union’s chief negotiator, told envoys from the bloc’s 27 member states that it’s up to Johnson to make the next move and denied that the two sides are nearing a breakthrough over their longstanding disagreement over fishing, according to officials with knowledge of his comments.

Key Developments:

• Barnier pessimistic about prospects for deal
• The pound posts largest decline in almost three months
• Johnson and von der Leyen will talk later this evening.

From Bloomberg Opinion: No-Deal Brexit Would Inflict Pain on Europe, Too: Lionel Laurent

Irish Foreign Minister Says the Situation Is ‘Very Difficult’ (10:07 a.m. Brussels time)

Simon Coveney told Bloomberg he’s still hoping for a deal “but it certainly looks very difficult at the moment.”

Currency Tumbles as Talks Run Into Trouble (10:04 a.m.)

The pound fell as much as 1.4% to $1.3258, its largest decline in nearly three months, in response to the impasse in negotiations. The yield on U.K. 10-year government bonds declined as much as six basis points to 0.29%.

Talks Will Collapse Unless There’s Progress Monday, U.K. Says (9:50 a.m.)

British officials regard Monday’s negotiations as vital, with one warning that some progress by the end of the day is essential if the talks are to continue.

Johnson’s call with von der Leyen on Monday evening is seen as the make-or-break moment, another U.K. official said.

Diplomat Says Negotiations Have Entered Endgame (9:36 a.m.)

The EU is ready to go the extra mile to secure a deal, but time is running out, one EU diplomat said following Barnier’s briefing to the envoys. The diplomat said it’s now up to the U.K. to choose whether it wants a deal or not and the talks could still go either way.

Hints That Talks Could Run Into Next Year (9:29 a.m.)

It’s more important to get the substance right than to get a deal quickly, one EU diplomat said following Barnier’s briefing. The diplomat reiterated that there has been no progress in negotiations over the weekend and all three contentious issues -- including access to British fishing waters -- remain open. The diplomat added that when it comes to the level-playing field, the U.K has not yet made the necessary choices. It’s the latest in a series of bleak reports about the state of negotiations just over three weeks before the end of the post-Brexit transition period.

Johnson Ready to Walk Out, Sun Says (9:07 a.m.)

Johnson is ready to walk away from the negotiations within hours unless the EU backs down from its “outrageous” demands, the Sun reported, citing an unidentified source close to the British prime minister. He could make an address to the country as soon as Tuesday evening, the newspaper said.

Gove to Meet with Sefcovic (9 a.m.)

U.K. Cabinet Office Minister Michael Gove will meet with European Commission Vice President Maros Sefcovic in Brussels on Monday. They are both co-chairs of the Withdrawal Agreement Joint Committee, which oversees the implementation of the Brexit divorce deal -- including the Northern Ireland Protocol.

Barnier Tells Diplomats No Breakthrough on Fish (8:30 a.m.)

The EU’s chief negotiator denied that the U.K. and EU are nearing a deal on fisheries, according to a diplomat with knowledge of the briefing.

U.K. Says Law-breaking Clauses to be Put Back in Bill (8:20 a.m.)

Controversial clauses that break the terms of the Withdrawal Agreement struck a year ago by the EU and U.K. will be put back in the bill, James Cleverly, a U.K. Foreign Office Minister said.

The Internal Market Bill is due to return on Monday to the House of Commons after the upper chamber, the Lords, stripped out the clauses. But in a Sky interview on Monday, Cleverly likened them to an “insurance policy.”

“The Internal Market bill contains really important clauses that protect the integrity of the U.K.: they will be put back in, because they matter,” he said. “Like all insurance policies, you would prefer to not have to use it.”

Barnier Pessimistic About Deal (8:18 a.m.)

Barnier was rather pessimistic about the prospects of a deal, said a senior EU diplomat present at this morning’s briefing.

The EU’s chief negotiator told envoys that divergences over the three well-known issues remain and that the ball is in Boris Johnson’s court to move, according to the diplomat.

Disagreements over the playing field for businesses, fisheries, and the governance of any agreement have dogged the talks since they started in March.

Barnier Tells Ambassadors Talks Are Continuing (8:00 a.m.)

The EU’s chief negotiator told diplomats that there is still no deal with the U.K. and that talks will go on, according to an official with knowledge of the conversation.

Barnier Arrives to Brief Diplomats (7:30 a.m.)

Michel Barnier arrived at the EU council to brief ambassadors after talks finished at midnight in Brussels on Sunday. Other than a brief “Good morning,” he didn’t speak to reporters outside.

Talks Are on a “Knife Edge” (Earlier)

With the negotiations moving only slowly, one EU official warned that expectations that an agreement will be reached within 24 hours are low. The EU has said that a summit of its 27 leaders that begins on Thursday now marks the effective deadline for a Brexit deal.

“Things are on a knife edge and it’s serious. My gut instinct is it’s 50-50,” Irish Prime Minister Micheal Martin said in an interview with broadcaster RTE on Sunday. “I don’t think one can be overly optimistic about a resolution emerging.”

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