EU PANIC: Brussels bloc set to suffer £30billion meltdown unless Barnier compromises now

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As wrangling over a free trade agreement reaches a crunch point, a new report has warned Germany, France and the Netherlands have the most to lose if Michel Barnier refuses to compromise in the rows over fisheries and common standards. German insurance giant Allianz said the chances of a no-deal Brexit have “considerably increased to 45 percent”. Their study adds: “A Hard Brexit could cost as much as €33billion in annual exports to the EU, with Germany, the Netherlands and France hit the hardest.”

Researchers said the consequences of failing to secure a Brexit trade deal would further compile economic misery on the bloc, which faces its deepest recession on record in the midst of the coronavirus pandemic.

They predict Germany could lose as much as £7.4 billion in annual trade with the UK as a result of a no-deal Brexit.

Boris Johnson has been adamant the Britain will trade with the EU on “Australia-style” terms, which would see the introduction of trade tariffs on imports and exports, if EU refuses to budge in the Brexit talks.

The Netherlands would be hit by a decrease of £4.3 billion and France of £3.3 billion in business with Britain if negotiators cannot broker a future relationship pact before the end of the year.

The report points out the impact of German car-makers, which would suffer a £2.6 billion-a-year slump, in a no-deal Brexit.

And Dutch manufacturers would also lose out on at least £950 million in trade with Britain each year without an agreement in place.

Allianz called on the EU and UK to conclude their negotiations in three weeks to ensure businesses on both sides have enough time to adapt to the changes.

They claimed a “technical extension” to the post-Brexit transition period could be used to ensure any agreement is fully operational.

Their report says: “It’s worth mentioning that if an agreement between the UK and the EU is not finalised by the end of October/mid-November, there won’t be enough time for a full ratification of the FTA before the end of the year.

“Hence, we don’t exclude the possibility of a technical extension of the transition period despite the commitment of both sides not to do so.”

The insurance firm also noted Britain would see a “five percent contraction in GDP and a 15 percent drop in exports” if it walked away from the EU without an agreement.

Mr Barnier, the EU’s chief Brexit negotiator, has agreed to remain in London until Wednesday to continue trade talks with UK counterpart Lord Frost.

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The pair are then expected to resume their wrangling over a free-trade agreement later this week in Brussels.

According to the Prime Minister’s spokesman, the UK and EU have finally begun work on a joint legal text.

Mr Barnier had previously refused to put pen to paper on the Brexit deal until Mr Johnson made significant concessions on fisheries and the so-called level-playing field.

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The spokesman said: “We are in now what is an intensive phase of negotiations.

“I wouldn’t wish to pre-empt what’s being discussed.

“It’s the first time that we have been negotiating on legal texts and across all areas at the same time and we have welcomed that fact.

“But there is also much work to be done if we are going to bridge what are the significant gaps that remain between our positions in the most difficult areas and time is very short.”

Earlier Mr Johnson said: “On EU negotiations … they’ve come back, I’m very glad to say, to discuss the way forward, we’ll see where we go.”

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