Theresa May, U.K. prime minister, speaks during a youth festival exhibition in China. (Photographer: Chris Ratcliffe/Bloomberg)

Juncker Says Chance of No-Deal Has Increased: Brexit Update

(Bloomberg) -- Theresa May is trying to renegotiate her Brexit deal but won’t change her red lines. The European Union is standing firm and stepping up contingency plans in case it all goes wrong.

Key Developments

  • EU says it won’t reopen the withdrawal agreement
  • Belgian PM says no-deal is "increasingly inevitable"
  • May and Labour leader Jeremy Corbyn had "serious and engaged" talks on Brexit
  • May’s due to speak with European Council President Donald Tusk and Irish Prime Minister Leo Varadkar later on Wednesday

Corbyn Says May Listened to Customs Union plan (5:15 p.m.)

Jeremy Corbyn told broadcasters that May “listened” to his concerns about the backstop and future customs arrangements in their meeting this afternoon. On the backstop, he said he told the premier “this would be the first time in British history we’ve entered into a treaty arrangement with anybody else in which there was no right to leave.”

He spelled out Labour’s call for a "comprehensive customs union" with the EU that gives Britain a say in any external trade deals. A government official said May asked questions about Corbyn’s proposals, but that the U.K. needs to have an independent trade policy post-Brexit.

May and Corbyn’s ‘Serious and Engaged Talks’ (4:15 p.m.)

After a 45-minute meeting in May’s House of Commons office, a spokesman for Corbyn told reporters the two party leaders had enjoyed a “serious and engaged" discussion over the customs union and would meet again soon.

While the meeting was “cordial,” the Conservatives “have their own set of priorities,” the spokesman added. Asked if May had indicated any change of position on the customs union, the spokesman said she was “seriously engaged” with the detail.

Barnier Criticizes May (4 p.m.)

EU chief Brexit negotiator Michel Barnier said the U.K.’s Brexit deal won’t be renegotiated and it’s “more essential than ever” to plan for no deal.

“For the first time yesterday,” U.K. Prime Minister Theresa May “openly called for the re-opening of the agreement,” Barnier told the European Parliament in Brussels. “She distanced herself from the agreement she herself had negotiated.”

Barnier said the EU is “open to ‘alternative arrangements” for the Northern Ireland border -- but in the future, not as part of the divorce deal.

"We’re ready to work on that as soon as the withdrawal agreement is signed,” he said. “But here and now no one, either on one side or the other, can say very clearly or precisely what form these alternative arrangements will take so they can be operational and meet the aims of the backstop."


Juncker Says Chance of No-Deal Has Increased (3:40 p.m.)

European Commission President Jean-Claude Juncker said the vote in Parliament on Tuesday has increased the risk of a disorderly exit. “A concept is not a plan; it is not an operational solution,” he said.

He reiterated that the EU will stick to the pledges made to Ireland on the border -- that’s the contentious part of the Brexit deal the U.K. now wants to renegotiate. “This is not a game,” he said. “It goes to the heart of what being a member of the EU means. Ireland’s border is Europe’s border, and it’s our union’s priority.”

Ireland Says We’ve Tried the Alternatives Already (2:30 p.m.)

Irish Foreign Minister Simon Coveney said he’s skeptical that there are workable alternatives to the backstop, and most of the ideas have been tested already and found wanting. Still, he said, “let’s test replacements”, but the backstop must remain as the backstop. In reality, his mind seems made up - it’s the backstop or bust.


France Prepares to Keep Defense Parts Moving (2 p.m.)

France published a new executive order that aims to maintain a normal supply of defense and space-industry components between France and the U.K. in case of a no-deal Brexit.

“This is one more executive order to prepare for the Brexit,” government spokesman Benjamin Griveaux told reporters. It would “avoid disruption that would be harmful to French companies’ interest and our defense system.”

The measure is part of a law passed in December in France to keep passenger traffic, road transport and trade operating between France and the U.K.

Coveney: Economics Won’t Trump Peace Process (1:45 p.m.)

In a speech in Dublin, Irish Foreign Minister Simon Coveney went off script to deliver what might turn out to be an important intervention. He said he wanted to make it “crystal clear” that the government wouldn’t allow economic self-interest to trump concerns around the peace process.

“It is vitally important that politicians in Westminster understand the overwhelming wish across society in Northern Ireland not to return to the borders and division of times past,” Coveney said.

That might give some Brexiteers, convinced Dublin will buckle to protect its trade links with the U.K., pause for thought.

May Sticks With Same Negotiating Team (1:20 p.m.)

The government is keeping the same civil service negotiating team as it tries to secure “legally binding” changes to the Brexit deal, according to May’s spokesman, James Slack, meaning will still be led by Oliver Robbins. There have been media reports that Crawford Falconer, the chief trade negotiation adviser to Liam Fox’s Department for International Trade, would join the team.

Slack also said May would speak by phone to Irish Prime Minister Leo Varadkar and the European Council’s Donald Tusk, and that her meeting with Labour leader Jeremy Corbyn will take place in the House of Commons at 3 p.m. The government is “pleased” the meeting is taking place, Slack said.

May Won’t Give Up Her Red Lines (12:50 p.m.)

Ahead of her expected meeting with Labour leader Jeremy Corbyn, May indicated she has no intention of abandoning any of her red lines -- especially moving toward the softer Brexit position of the main opposition. May said she’s committed to the U.K. having an independent trade policy after Brexit -- in effect ruling out a customs union Labour wants -- and is also determined to leave the EU’s common fisheries policy.

May also repeated her line from Tuesday, that her government is engaging with the so-called Malthouse Compromise -- though her words again fell short of a full endorsement.

EU Steps Up No-Deal Planning (12:30 p.m.)

The main Brexit news from Brussels this morning is all about no-deal planning. The European Commission adopted a final set of contingency proposals, in areas including social security and the EU budget. But there’s a warning in the plans: They cannot "mitigate the overall impact of a ‘no-deal’ scenario," and don’t replicate the transition period that an orderly divorce would provide.

EU negotiators will also start talks on new maritime connections between Ireland and the other EU countries, the bloc said.

In good news, Eurotunnel is ready for the worst, the company said on Wednesday.

London Ambulance in Talks With Military Over Unrest (12 p.m.)

According to a report in the Evening Standard, the London Ambulance Service will hold talks with the U.K. military over support for frontline crews in the event of Brexit triggering political unrest.

Juncker Says Chance of No-Deal Has Increased: Brexit Update

U.K. Minister: Border Technology Doesn’t Exist (11.50 a.m.)

Last night’s vote puts renewed pressure on the U.K. to identify technologies that could avoid a hard border on the island of Ireland. But despite repeated questions from lawmakers in Parliament this morning, Northern Ireland Minister John Penrose was forced to repeatedly admit to parliament that no technology exists to avoid such infrastructure. The Cabinet Office’s own study found no existing software or technology would be up to the job.

“That’s why the political declaration outlines that there will be urgent work on alternative arrangements to permanently guarantee no hard border on Northern Ireland,” he said.

U.K. Threatening to ‘Jump Out of Window’: Coveney (10.43 a.m.)

Irish Foreign Minister Simon Coveney offered few chinks of light for Theresa May in an interview with RTE this morning. He said the idea that the U.K. could exit the bloc without a deal amounts to a threat to “jump out the window,” adding that Ireland couldn’t approach the negotiation on the basis of threats.

“We are being asked to replace the backstop with wishful thinking,” he said, adding there are no obvious ‘magic’ solutions out there to reopen the withdrawal agreement. Instead, he said that the focus might be on the non-binding political declaration, which would be tweaked in an effort to calm U.K. concerns.

Austria’s Kurz Says EU Won’t Renegotiate (9.15 a.m.)

Austrian Chancellor Sebastian Kurz ruled out new negotiations with the U.K. on the legally binding part of the Brexit deal, offering only tweaks to the non-binding political declaration about future ties between the two sides.

“The Austrian government’s but also the European Union’s message to London is clear: our hand is extended for a common solution, also for clarifications on the issue of the future relationship if that’s what it takes,” Kurz told journalists after the weekly government meeting in Vienna. “But we’re not ready to renegotiate the exit agreement.”

Kurz said his cabinet approved a draft omnibus law to cover contingency measures necessary if the U.K. crashes out of the EU without an deal.

Barclay Refuses to Be Drawn on ‘Technicalities’ (8.15 a.m.)

Despite the optimism of government ministers this morning that they’re closer to finding a way forward, Brexit Secretary Stephen Barclay was unable to give any specific details on the “alternative arrangements” to the backstop that May will now be seeking with the EU.

Barclay told BBC Radio’s Today program that he didn’t want to “get into the technicalities of it” and that the government is still “exploring” technologies that could be used instead of the backstop.

Harrington Says He’d Quit To Vote Against No Deal (7:45 a.m.)

Business Minister Richard Harrington said many ministers like him would resign if May failed to reach a new plan with the EU and instead opts for a no-deal exit in two weeks’ time. He told Sky News that he only voted with the government last night as he wanted to give May another two weeks to agree a deal.

“No-deal is the worst of any evils. It’s an absolute disaster for this country and we’ve got to do anything we can to avoid it,” he said, adding that blocking no deal remained his priority.

Coming Up:

  • May takes Prime Minister’s Questions in Parliament at 12 p.m.
  • Labour leader Jeremy Corbyn is expected in Downing Street for talks
  • PM is due to hold phone call with European Council President Donald Tusk this evening

Earlier:

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