EU Leaders Call for More Preparations for No-Deal Brexit

(Bloomberg) -- European Union leaders will say next week they’re concerned about the lack of progress in Brexit talks and call for member states to step up preparations in case no deal is reached, according to the first draft of their summit statement.

“The European Council renews its call upon member states and all stakeholders to step up the work on preparedness at all levels and for all outcomes,” the leaders will say, according to the document, which was circulated among member states on Tuesday and obtained by Bloomberg.

The leaders will say they’re concerned about the lack of "substantial progress” on the crucial issue of the Irish border. They will also warn that if there’s no divorce agreement before the scheduled departure date of March 2019, there won’t be a transition -- the grace period that businesses are counting on for the first two years after the split.

They will insist “on the need for intensified efforts so that the Withdrawal Agreement, including its provisions on transition, can be concluded as soon as possible in order to come into effect on the date of withdrawal,” according to the document.

Work on the political declaration about future trade and security ties, which will sit alongside the Brexit deal and form the basis of negotiations on the two sides’ future relationship, also needs to be “accelerated.”

“This requires further clarity from the U.K. as regards its position on the future relationship,” leaders will say. The British government is expected to present its vision for the future relationship in July.

Leaders will meet in Brussels on June 28-29. Their draft conclusions will undergo revisions before they’re published after the meeting.

A separate document published jointly between the U.K. and the EU highlighted limited progress on negotiations on the withdrawal agreement since March.

“Engagement by the U.K. on remaining issues such as the protection of personal data and geographical indications is also to be welcomed,” the EU’s chief Brexit negotiator, Michel Barnier, said. “Serious divergences remain, however, on the protocol on Ireland/Northern Ireland.”

While progress in the negotiations represented a “step forward,” Barnier said, “a lot more work needs to be done by October.”

The joint document shows that while some disagreements have been resolved in the areas of customs, sales tax and nuclear material, the biggest areas of dispute remain.

U.K. Brexit Secretary David Davis said: “There remains work to be done, but we are taking important steps forward.”

©2018 Bloomberg L.P.

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