/5 signs this is the real Brexit crunch (and 4 that it isn’t)

5 signs this is the real Brexit crunch (and 4 that it isn’t)

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LONDON — Brexit-watchers are used to “crunch” weeks coming to nothing.

Most weeks since the European Council summit in October — which the U.K. insisted was a deadline, before it wasn’t — have been tipped as the week a deal could be done. But still negotiations continue.

This week, however, could be different. There are numerous signs suggesting a deal could come together in the next few days, and a feeling among observers that things are finally getting serious.

POLITICO has rounded up some of the indications that this could be the week … plus a few that suggest this saga will roll on once again.

1. Both sides are pointing to this week

Politicians and officials on both sides say things are coming to a head. “I do think that this is a very significant week,” Dominic Raab told the BBC at the weekend. “The last real major week subject to any further postponement, in terms of the timing.”

Numerous EU figures have flagged this week as the one to watch, arguing the ratification process becomes complicated otherwise. Getting a deal approved by national and regional parliaments — which would be needed if the EU determines the final deal is a so-called “mixed agreement” — is no longer possible. But even ratification by the U.K. and European Parliaments plus sign-off by EU countries — the process if its scope is judged to only cover competences assigned to Brussels — is becoming increasingly difficult.

2. An actual deadline looms

There’s just one month to go until the Brexit transition period ends. The deadline for the end of talks can be put off but cannot end up in 2021 without the two sides falling off a cliff edge and tariffs kicking in.

Britain will be out of the single market and customs union on January 1 and negotiations after its departure could be a different ball game. Both sides want to avoid the imposition of tariffs. So ratification claims aside, something needs to happen before December 31, and time is running short.

3. The timetable has gone out the window

Talks are at such a crunch stage that the formal agenda for what will be discussed has been scrapped, with both sides taking each day as it comes, a U.K. official told POLITICO’s London Playbook.

When formal negotiating rounds began, timetables were made public, showing exactly what would be discussed and when. That feels like a long time ago now. Talks also stretched late into the night on Sunday, Downing Street confirmed.

4. An offer on fish

The row over fish is finally getting a little more light as well as heat. Last week, RTE’s Tony Connelly reported that the EU was offering that up to 18 percent of the fish quota in U.K. waters currently allocated to EU27 fleets be restored to the U.K.

Brussels quickly insisted it was one of a number of ideas floating around and a U.K. official dismissed it as “derisory.” The British fishing industry agreed that the alleged offer was nowhere near good enough, but saw hope in the move. “The gesture, if true, is significant because it indicates a movement away from the very inflexible negotiating mandate they set for themselves,” said Barrie Deas, chief executive of the National Federation of Fishermen’s Organizations.

Meanwhile, Irish Foreign Minister Simon Coveney on Monday began debating who should have right of access to fish based on where they originate and live — a public indication that the EU might be willing to base quota decisions on so-called “zonal attachment.” That’s a core demand from the U.K., which allocates quotas based on where fish stocks live instead of starting from baselines set out in historical agreements. EU officials have accepted this position behind the scenes for months, but the public comments suggest the rubber is hitting the road in the negotiating room.

The EU dismisses the suggestion, alluded to in London, that fish is the real sticking point, and instead insists the so-called “level playing field” rules designed to ensure British business can’t undercut the bloc while retaining access to the EU market are the crucial element. This difference in emphasis between the two sides on the real sticking points suggests both sides may be preparing to compromise.

5. Business pressure

Firms on both sides are getting extra nervous and piling the pressure on politicians to come up with solutions. The less time there is between a deal and the end of the transition, the less time companies have to prepare for changes.

BusinessEurope last week issued a cry for help, arguing in a statement that, after the coronavirus shock, nations “cannot afford another major disruption caused by a no-deal situation,” and adding: “It is time to conclude an agreement.”

On the U.K. side, firms have been tearing their hair out about the lack of information about the future, while business leaders have urged the EU to phase in its border controls to ease the end of the transition.

Meanwhile, the war of words between the U.K. and the haulage industry appears to have been put aside, as all involved knuckle down to make the necessary preparations for January. One haulage representative said Cabinet Office Minister Michael Gove was listening to concerns more than in recent months.

But but but …

We’ve been here so many times before and there is a fair chance this week will turn out like all the others and not produce a deal. Here are four arguments for another dead-end.

1. A no-deal could shake things up

If the two sides fail to reach a deal, World Trade Organization rules kick in and tariffs are required for goods crossing borders. But trade talks could continue in the hope a better solution could be found.

Some on the Brussels side think a rupture might focus minds in London. “When they gather the size of the disruption, they will start knocking on our door soon enough,” one EU official said. “The logic of international trade negotiations is relatively simple: size matters.”

London has suggested in the past that it won’t return to talks immediately after a no-deal exit.

2. No-one wants to blink first

Both sides think running the clock down will put greater pressure on the other to cave first — but neither wants to be the one to walk away from the table.

Taken to its limits, that could mean a no-deal exit almost by accident. “We might end up sleepwalking toward the end of the transition period,” the same EU official said.

3. EU countries want to step up no-deal preparations

EU countries are increasing pressure on the European Commission to boost its no-deal preparation by publishing contingency measures.

“We’re staying at the table as long as meaningful, but we should really allow no-deal preparations in parallel,” an EU diplomat said. Cautious of being seen to undermine the trade talks, the Commission continues to hold off on those plans but it remains to be seen how long they can ignore the pressure coming from different capitals.

However, German Chancellor Angel Merkel cautioned against contingency planning. “I would wait with it as long as it is possible,” she told a videoconference with European affairs lawmakers from different national parliaments and the European Parliament. “Instead, we should put all our energy into the final stage of the negotiations.”

4. There is still a month to go.

A month is still a month. While the EU is mulling its options to get around the ratification issue, talks could go down to the wire. One EU diplomat said there could be a “tricky, technical” solution found to allow the bloc to ratify the deal after the transition ends.

If that’s possible, the clock can continue to tick down. All parties lie about the deadlines in trade deals, and the talks have already gone on longer than the two sides said they could. Surely they could be squeezed a little further.

Hans Joachim Von Der Burchard and Shawn Pogatchnik contributed reporting.