Picture: ISTOCK
Picture: ISTOCK

Dublin/Brussels — EU officials are telling businesses that the chances of a no-deal Brexit are as high as 50% and are urging companies to ramp up their contingency plans, a person familiar with the matter said.

Despite new UK proposals to stay close to the bloc on trade and regulations, European officials remain extremely negative on the prospects of a deal, according to the person, who asked not to be identified as contacts with business are happening in private.

Officials say the chances of no deal have risen significantly over the past three months, and warnings about that prospect have moved to the top of the agenda in meetings with business representatives, the person said. European Commission officials are meeting business groups to discuss the consequences of failing to reach an accord with the UK, a second person said, amid concern that companies aren’t doing enough to prepare.

The EU has also urged companies publicly to step up their efforts and has said the bloc’s institutions will increase their work to prepare for the worst.

The UK is set to unveil a detailed proposal for the next stage of negotiations on Thursday, but it’s not clear if it will be acceptable to the EU side. There’s little appetite to compromise on the EU’s principles and allow Britain to pick and choose the best bits of EU membership. The issue of the Irish border remains a stumbling block.

One EU premier, who, last month, heard UK Prime Minister Theresa May’s address on Brexit during the EU summit in Brussels, said he was shocked by her tone and left thinking the risk of talks collapsing without a deal was now almost 50-50, according to an official he briefed. A no-deal split is the scenario businesses fear most.

If the two sides can’t reach a deal, companies will suddenly find themselves outside the rules, regulations and free-trading arrangements that they have built their businesses around for decades.

Bloomberg

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