Brexit in the spotlight again
UK breaks out of isolation, with growing concerns over lack of trade deals.
Brexit Returns To UK Agenda Again As Country Starts Out Of Three-Month Coronavirus Quarantine.
In recent months, trade negotiations with the EU have made little progress. Fears grow that the UK could return to the scenario «no deal» at the end of the year, which will exacerbate the economic uncertainty caused by the coronavirus crisis.
Fundamental differences remain between the EU and the UK with regard to fishing rights and so-called «level playing field», ensuring fair competition between the two parties. For example, on issues such as taxation and legislation on state aid. Progress is also needed to verify goods entering Northern Ireland (whose border with the Republic of Ireland is transparent and will be the only land border between the UK and the EU) from the UK.
EU Chief Negotiator on Brexit on Wednesday Michelle Barnier re-emphasized the EU’s often-voiced position that the bloc will not allow Britain to retain those advantageous elements of EU membership that the country would like to preserve after the end of the transition period.
«Britain asks much more of the EU than Canada, Japan or other partners», – he said on Wednesday, according to Sky News.
Speaking at a forum in Brussels, Barnier added that in many areas Britain is seeking to maintain the benefits of EU membership without restriction. The country seeks to select the most attractive elements of the EU single market without corresponding obligations.
The US government insists that it will not extend the transition period beyond 2020 and insists it wants to close the deal before the end of that period. Despite assurances, business groups are concerned about the limited time frame to close the deal and that Brexit is less important compared to the unprecedented economic shock of the coronavirus crisis..
On Thursday, the outgoing head of UK industry body CBI Carolyn Fairbairn told the BBC that the business has neither the space nor the resources to deal with the potential abandonment of deals with the EU customs union and the single market (whose membership guarantees standards and duty-free trade) at the end of the year.
Business groups are not alone in their fears about scenario dangers «no deal».
The OECD warned on Wednesday that the UK is likely to be the hardest hit developed economy as UK GDP could contract 11.5% in 2020.
Rating agency Moody&# 39; s warns Brexit no deal «will do significant damage to the UK’s potentially weak recovery from nearly a century deep recession» after the pandemic.
While such an outcome is not Moody’s current baseline projection&# 39; s, «it becomes more and more likely», according to the rating agency.
«By the end of 2020, when Brexit follows the scenario "no deal", the size of the UK economy will still be well below the level expected in Moody’s pre-virus outlook&# 39; s. Its resilience will also be reduced, along with higher public debt and unemployment, and less investment than expected before the pandemic.», – states Moody&# 39; s.
According to Moody analysts&# 39; s, the baseline scenario still assumes that the UK and EU will reach an agreement by the end of the year, «albeit limited, trade oriented. But the risks of inaction are on the rise».