Brexit Negotiators Brace for Summit Showdown as Talks Drag

(Bloomberg) -- The stage is set for a showdown on Brexit at a European Union summit next week.

French President Emmanuel Macron's reluctance to make concessions on fish is stirring concern among officials he could sink efforts to reach a wider trade accord as negotiators begin on Monday a two-week period of intense talks.

That follows Saturday's call between Boris Johnson and European Commission President Ursula von der Leyen. The two sides are nervous that major compromises on the key disagreements of fishing rights and state aid are still to be made, officials said.

The EU's chief negotiator, Michel Barnier, will discuss Brexit with German Chancellor Angela Merkel on Monday too, a sign the bloc is weighing where it can and can't make concessions.

“We are going into the last stages of these talks with a constructive attitude,” German Foreign Minister Heiko Maas told reporters in Berlin after his own meeting with Barnier. “We still want a solution but of course there are areas which for us are very important.”

Officials say Macron holds the key if the EU's position is to soften.

The fishing industry may represent only a tiny proportion of the French and U.K. economies, but it has assumed out-sized political importance in the discussions.

The EU has said there can be no wider trade deal without an accord on what access EU boats will have to British waters.

Britain sees the issue as a matter of sovereignty and wants to replace a quota system it says unfairly favors EU fishermen with a series of annual negotiations that would be more favorable to the U.K.. Macron, mindful of his country's domestic fishing fleet, has strongly resisted.

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Johnson told von der Leyen he wants to know if a deal is possible by Oct. 15 -- the same day that Macron and his 26 fellow EU leaders are due to hold a summit in Brussels across the road from where the Brexit negotiations will be taking place.

Most EU countries and the European Commission, which is negotiating with the U.K. on the bloc's behalf, are known to favor a softer position than Macron and fear that his hard-line stance could scupper chances of a wider deal.

At a meeting of leaders last week, senior officials talked down prospects of an agreement for this reason, despite a relatively upbeat assessment from Johnson and von der Leyen a day later.

Talking Still

Negotiations will resume in London this week and continue in Brussels.

If there's still no deal by Oct. 15, Macron is likely to come under pressure from his fellow leaders at the summit to back down, officials said.

But neither side wants the discussions to play out like this. The U.K. because it wants a conclusion before then. The EU because it wants to speak on Brexit with one voice.

Talking to the BBC on Sunday, Johnson said a deal with the EU is “there to be done,” but warned of “difficult issues” that are yet to be resolved. While he doesn't want to leave without a deal “we can more than live with it” and “prosper mightily,” he said.

Negotiators also need to make progress on the issue of subsidies to business, with the EU demanding the U.K. provides a clearer set of principles that would restrict state aid, with a legally enforceable dispute resolution mechanism.

If the two sides can't reach an agreement by the year-end, Britain will leave the EU's single market and customs union without a trade deal in place.

That would leave millions of consumers and business grappling with disruption and additional costs as tariffs and quotas are reimposed for the first time in a generation.

©2020 Bloomberg L.P.