Brexit protesters wave flags made up of a European Union flags and British Union flags. (Photographer: Chris Ratcliffe/Bloomberg)

EU Said to Mull Tougher No-Deal Brexit Alert If Talks Stall

(Bloomberg) -- The European Union is weighing a much stronger warning on the risk of Brexit talks collapsing without a deal if the U.K. fails to lay out its position in more detail next month, said a person familiar with the matter.

The bloc has made clear Britain needs to show a more detailed view of how it intends to keep the Irish border open by the time EU leaders gather at the end of June -- as yet, Prime Minister Theresa May hasn’t produced the firm, written proposals the EU regards as necessary to move negotiations forward.

Though the bloc will stop short of threatening to halt negotiations, it may issue a warning that a transition period after Brexit is in jeopardy and that the EU is boosting preparations for the U.K. crashing out without a deal, the person said, asking not to be identified because the deliberations are ongoing.

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The prime minister is at a crunch point in the Brexit process with pressure from all sides to make a clear decision on what the U.K. wants, to stop delaying and deliver the divorce. May has informally raised the possibility of keeping the U.K. tied to EU customs rules for years as a last resort to keep the Irish border open, though her government has yet to firm up those proposals.

While EU officials haven’t seen precise details of May’s plan, they have reacted with skepticism, pointing out that it doesn’t deal with many issues thrown up by Britain’s intention to leave the single market. At a minimum, the U.K. must do more to fill in those gaps, the person said.

Time Pressure

The EU wants details over the coming weeks, the person said, and by the June summit meeting at least an agreed view of where negotiations will end up in terms of avoiding border checks in Ireland, the person said. The proposals can then be converted into a legal text later.

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At present, the only realistic plan on the table for avoiding a hard border is the EU’s backstop option, which would effectively keep Northern Ireland in the bloc’s customs union and parts of the single market if needed. But that amounts to erecting a border between Northern Ireland and mainland Britain, which May has said is unacceptable.

“If they don’t like the proposals based on what we’ve already agreed, they need to come forward with something else,” Ireland’s Europe Minister Helen McEntee said in an interview in Oslo on Wednesday. A “customs arrangement on its own wouldn’t suffice,” she said.

In Dublin, Irish senator Neale Richmond dismissed the so-called maximum facilitation or “max fac” option, one of two being considered by Britain to solve the border impasse, as so outlandish it might have been designed by Willy Wonka, the children’s book character.

The proposal would try to minimize -- but not eliminate -- border checks on goods through the use of technology and trusted trader schemes.

But the technology won’t be ready for “decades” and carries enormous costs, Richmond, who chairs the Irish Senate’s Brexit committee, said at a conference.

©2018 Bloomberg L.P.

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