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Brexit drama: PM Johnson to answer EU's demand to give ground

The United Kingdom formally left the EU on Jan. 31, but the two sides are haggling over a deal that would govern around $900 billion in annual trade when informal membership - known as the transition period - ends on Dec. 31.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Prime Minister Boris Johnson will on Friday give Britain's response to the European Union's demand that he either gives more concessions to secure a trade deal or braces for a disorderly Brexit in three months.

A tumultuous "no deal" finale to the United Kingdom's five-year Brexit crisis would sow chaos through the delicate supply chains that stretch across Europe and beyond - just as the economic hit from the novel coronavirus bites.

At what was supposed to be the "Brexit summit" on Thursday, the EU delivered an ultimatum: it said it was concerned by a lack of progress and called on London to make concessions or brace for a messy Brexit on Dec. 31.

Britain's chief negotiator, David Frost, said he was disappointed and surprised that the EU was no longer committed to working "intensively" for a deal. Johnson, he said, would set out his response.

"Surprised by suggestion that to get an agreement all future moves must come from UK," Frost, who casts Brexit as a revolution that has brought the nation state back into focus, said. "It's an unusual approach to conducting a negotiation."

The United Kingdom formally left the EU on Jan. 31, but the two sides are haggling over a deal that would govern around $900 billion in annual trade when informal membership - known as the transition period - ends on Dec. 31.

As he grapples with a swiftly accelerating second wave of the novel coronavirus outbreak, Johnson will ultimately have to make the final call on whether to accept a narrow trade deal or go for a more tumultuous no-deal that could be blamed on the EU.

After Johnson's bid to undercut the 2020 Brexit divorce treaty, there are fears that London is employing what one European diplomat said was Madman Theory - a reference to former U.S. President Richard Nixon's attempt to convince Moscow that he was irrational during the Cold War.

He has repeatedly said that his preference is for a deal but that Britain could make a success of a no-deal scenario, which would throw $900 billion in annual bilateral trade into uncertainty and could snarl the border, turning the southeastern county of Kent into a vast truck park.

(Writing by Guy Faulconbridge, Editing by Paul Sandle)


Copyright (2020) Thomson Reuters.This article was written by Guy Faulconbridge from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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