U.K. Prime Minister Boris Johnson and Ursula von der Leyen, the president of the European Commission, have finally come to an agreement: A “no-deal” Brexit is more than likely at the end of the year, when the U.K. leaves the European single market, and breaks trade and economic ties with its largest market by far.
Von der Leyen on Friday gave a report to European Union leaders on her dinner date with Johnson earlier this week, and warned them that “the probability of a no-deal is higher than of a deal,” according to a senior EU diplomat quoted by Reuters.
This didn’t come as a total surprise to the heads of state and governments gathered in a summit to talk about their economic recovery plans and budget for next year. The mood after the last-chance dinner on Wednesday had been resolutely subdued, with the U.K. government briefing the British press that the EU had presented demands that were still unacceptable on the “level playing field” that both sides have been working on for years.
Johnson had struck a similar tone on Thursday, warning his countrymen that “looking at where we are [he thought] it’s vital that everyone now gets ready for” the absence of a deal, a scenario he still calls the “Australian option,” even though the EU doesn’t have a trade treaty with Australia.
The EU also published on Thursday a set of “contingency measures” to ensure that road traffic and air travel would still be possible between the U.K. and the continent on Jan. 1, including regulations that would have to be passed by the European Parliament before the end of the year.
The optimistic statement by Johnson that the U.K. would “prosper mightily” if it goes the “Australian way” is contested by most economists, including the country’s Office for Budget Responsibility, which has shown that a no-deal Brexit will have a more adverse impact on the UK economy than the coronavirus pandemic.
But it also prompted a warning from former Australian prime minister Malcolm Turnbull. “Be careful what you wish for,” he said in a BBC interview, noting that there are “very large barriers to Australian trade with Europe” — which is precisely the reason why the two sides are currently negotiating the same type of trade deal that the U.K. is walking away from.
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