Brexit POLL: After Merkel’s no deal warning, should UK call EU’s bluff and walk away? VOTE

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Britain left the bloc on January 31 and pressure is mounting to agree a free trade deal before the end of the year when the transition period in which the UK remains in the EU single market and customs union expires. But talks have stalled on a wide range of issues including fishing rights, security and data protection.

The EU and in Germany must be prepared for the case that an agreement will not happen

Angela Merkel

Ms Merkel told the German parliament the EU must now prepare for the future relationship negotiations ending without an agreement.

She said: “I will continue to work for a good solution, but we, in the EU and in Germany, must also be prepared for the case that an agreement will not happen after all.”

The deadline falls within Germany’s six-month rotating presidency of the EU which began which it took over yesterday.

Ms Merkel said: “Progress in talks is, to put it cautiously, very limited.

“We have agreed with Britain to speed up the talks in order to seal a deal in the autumn that must be ratified by the end of the year.”

A round of “intensified negotiations” is taking place this week and the UK has insisted it still wants to “work constructively” with the EU.

Boris Johnson’s official spokesman said a deal was still possible but Britain was prepared for either scenario.

The spokesman said: “We believe that there is a free trade agreement to be reached but we have also been very clear that we will be prepared for either eventuality at the end of the year, whether that be a free trade agreement or whether that be having a trading relationship based on the same terms that Australia currently has.”

German Foreign Minister Heiko Maas criticised London, saying the talks were moving “very sluggishly and slowly”.

Mr Maas said: “This is partly because we don’t know if the British want an agreement or not.

Earlier this week European Commission President Ursula von der Leyen warned Brussels was better prepared for a no deal situation than the UK.

Ms von der Leyen insisted the EU negotiators will not budge on a wide range of issues including fishing rights, data protection and the European Court of Justice.

She told Deutschlandfunk radio: “Well, we want an agreement with our British friends, but we don’t want it at any costs.

“That means our principles will not be abandoned and indeed, one issue is fair competition, it has to be.

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“The second is the fact that we want our citizens to have the European Court of Justice in the dispute settlement mechanism for the protection of fundamental rights and where European law is concerned, that is part of it.

“Fishing is a big issue and the issue of data protection if we also provide access to our data.

“So, these are basic principles in addition to the many, many, many other topics, which of course will continue to be negotiated with each other.

“And here we are very clear that we want to see them respected, just as Britain of course also has its points of view.

“We want an agreement. It is better for both parties. But we also say that if there is no agreement, we are prepared and we are better prepared.”

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