Johnson to Intervene in Brexit Talks as EU Seeks Concessions

(Bloomberg) -- Boris Johnson will make his first personal intervention in the Brexit negotiations since June when he holds talks on Saturday with European Commission President Ursula von der Leyen in an attempt to unlock a deal.

The British prime minister and the EU chief will discuss how the two sides can reach an agreement on their future trade and security partnership and what compromises each is willing to make.

Speaking to reporters in Brussels on Friday, von der Leyen signaled that she wants to allow the Brexit talks to move on to their final intensive phase -- but only if the U.K. is prepared to make concessions.

“It's good to have a deal, but not at any price,” she said. “This is so difficult, but overall where there is a will there is a way.”

As months of formal negotiations over their future relationship came to an end on Friday, officials said both sides have made limited headway on long-standing stumbling blocks, but a deal depends on the two political leaders now being able to reach a compromise.

Both the U.K. and EU want to secure an accord, even if officials on either side plays up or down the chances of a deal in order to wring some concessions out of the other. But, with time running short, the risk of failure remains.

Skeptical

EU leaders remain skeptical about the prospects of a deal, according to one EU official close to the discussions.

“Much will be determined by what the U.K. wants and what the U.K. doesn't want,” German Chancellor Angela Merkel said at a press conference on Friday. “It's up to Britain to decide. But as long as the negotiations are still going, I am optimistic -- but, of course, I cannot report a breakthrough.”

The pound climbed as much as 0.5% to $1.2954 in London on hopes that Johnson and von der Leyen's call may lead to that breakthrough.

The EU's chief negotiator, Michel Barnier met with his British counterpart David Frost on Friday and will on Monday meet with Merkel in Berlin to discuss the state of play.

Some progress was made this week on two of the biggest obstacles to a deal: the U.K.'s state-aid policy and the measures needed to enforce any agreement, officials said. But the two sides are still at loggerheads over what access EU fishing boats will have to U.K. waters, something that could yet scupper an overall deal.

‘Constructive'

This week's round of talks was “constructive and wide-ranging,” Johnson's spokesman, Jamie Davies, told reporters. “We have always been clear we will work hard to try and agree a free-trade agreement.”

In Brussels, officials are hoping that Johnson's intervention will have the same effect as his call with von der Leyen in June when he resuscitated the negotiations by leaving EU chiefs in no doubt that a deal was his preferred option and that he understood what compromises were needed.

Johnson has said he wants a deal by Oct. 16, which would mean intensive joint drafting work -- the so-called tunnel -- would need to begin immediately. The EU is more relaxed and is willing to allow talks to continue for at least another month.

If the two sides fail to reach a trade agreement by the end of the year, when Britain leaves the EU's single market and customs union, millions of consumers and business will suffer the cost and disruption of tariffs and quotas and relations between the two sides could be poisoned for a generation.

©2020 Bloomberg L.P.