The European Union’s chief Brexit negotiator Michel Barnier is meeting with chancellor Angela Merkel in Germany this morning, ahead of his trip to London on Wednesday for more intense talks with his British counterpart David Frost.
Barnier met with German foreign minister Heiko Maas on Monday morning, who said that the coronavirus pandemic has made getting a Brexit trade deal more urgent than before.
“With today’s health and economic challenges, people on both sides of the channel have enough to shoulder, so it would be totally irresponsible to burden them in this position with additional problems through a no-deal,” Maas said after the meeting with Barnier.
Merkel said in Brussels on Friday (2 September) that she remained hopeful that reaching a trade deal before the end of the year was still possible.
“I can’t announce a breakthrough,” Merkel said. “As long as negotiations on Brexit are ongoing, I’m optimistic.”
The deadline for reaching a completed trade deal was set for mid-October. However, on Saturday (3 October), UK prime minister Boris Johnson and European Commission head Ursula von der Leyen approved a one-month extension to the negotiations. They noted that the extension was justified in order to reach a deal on security and trade.
A joint statement after their phone call said Johnson and von der Leyen “agreed on the importance of finding an agreement, if at all possible, as a strong basis for a strategic EU-UK relationship in future.”
“They endorsed the assessment of both chief negotiators that progress had been made in recent weeks but that significant gaps remained, notably but not only in the areas of fisheries, the level playing field and governance,” the statement continued. “They instructed their chief negotiators to work intensively in order to try to bridge those gaps.”
Goldman Sachs said in a note to clients today that the UK and EU were likely to reach a post-Brexit trade deal by early November, but that a breakdown in negotiations “cannot be ruled out.”
“Our core view remains that a ‘thin’ zero-tariff/zero-quota trade agreement will likely be struck by early November, and subsequently ratified by the end of December,” Goldman analysts said in a note.
Last week, the EU launched legal action against the UK’s Internal Market Bill, saying that it goes against the British government’s legal commitments under the Brexit divorce treaty. However, legal proceedings could take years.