Michel Barnier has spoken to Eurofi. He described Brexit as a lose-lose situation, with no added value. He said:
- there can be no frictionless trade outside the Customs Union and Single Market so businesses will be faced with barriers and checks that are not in place today and this will have an impact on value chains. The worst outcome would be a no-deal scenario with WTO terms;
- the cost will be substantially higher for the UK than the EU because trade dependency is far higher on the UK side, the UK attracts Foreign Direct Investment to serve EU markets but with non-tariff barriers some companies will rethink their strategy, EU talent may find the UK less attractive and the UK will have to negotiate many new agreements to report the 750 that cover it as an EU Member State;
- the EU will need to accelerate reforms to build a stronger euro area and single market and be sure the remaining 27 Member States remain integrated. He denied that the EU desperately needs the City;
- he said that the UK’s decision to move away from EU rules, specifically that it will not accept common EU supervision and enforcement tools means that the EU cannot accept mutual market access without the common safeguards that underpin it. So, while the EU intends to keep the Single Market open with third countries, it does also plan the future FTA to include the right of establishment, with the UK declared as “equivalent” where possible; and
- the EU does not intend to punish or discriminate against the UK and will use the transition period to prepare for the new relationship.