No deal panic: Brussels warned to accept Boris’s Brexit demands or PM will walk away
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A level-playing field on state aid has been one of the main areas of divergence between the two sides throughout Brexit talks. The two sides are yet to make progress on the issue, thus causing analysis and economics specialist, Eurointelligence to claim the EU must drop its demands on the issue. Despite the uproar over the UK Internal Market Bill, the group insists Brussels must treat Britain as a normal trading partner if a deal is to be agreed.
Amid the pressure from some Brexiteers, the group also claims Mr Johnson may be forced to leave the transition period without a free trade agreement at the end of the year.
The group wrote: “Nobody would regard it as a defeat if Johnson were to agree to the standard terms on state aid in international trade agreements.
“The same goes for other level-playing-field issues, such as environmental and labour standards.
“But we think this is the marker of a broader line between perceived success and failure.
“A deal will happen if the EU agrees to treat the UK as a normal trading partner.
“But such a consensus has yet to emerge in Brussels.
“It won’t happen until October. If it doesn’t emerge, or only insufficiently, our expectation is that Johnson will walk.”
Michel Barnier has demanded the UK sign up to a level-playing field on the issue of state aid.
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This is to stop the UK offering more favourable conditions to companies wishing to come to Britain as opposed to the EU.
However, UK officials have stated this will entangle Britain into EU law despite being an independent state.
The issues over state aid escalated further following the new UK Internal Market legislation which was brought to the Commons this week.
Under the Bill, the Secretary of State is the sole power who determines the notification of any state aid to the EU.
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Officials in Brussels have stated, due to this, the legislation breaks elements of the withdrawal agreement which was agreed in October.
Mr Frost and Mr Barnier held talks this week to discuss a free trade agreement.
Although the informal deadline of October is approaching, a UK Government spokesperson stated little progress had been made.
In a statement, the spokesperson did state the UK still held the hope of agreeing a deal by mid-October.
They said in a statement: “The UK’s negotiating team had useful informal discussions with the EU this week as we seek to reach an agreement by mid-October on our future relationship.
“These covered a broad range of issues and some limited progress was made, but significant gaps remain in key areas, including fisheries and subsidies.
“We will continue to work hard to bridge those gaps in talks next week, without compromising our fundamental position of being an independent country.”
Talks will continue next week as the two look to reach an agreement.
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