Merkel ally fears grave 'consequences' for German industry as no deal panic hits Brussels

4 mins read

An ally of Angela Merkel and a leading MEP admitted that there will be grave “economic consequences” for Germany if the Brexit talks break down. It is understood Britain and the EU have to strike an agreement this weekend for the deal to be ratified by the end of the transition period. However, a senior UK Government source claims the prospect of a breakthrough is “receding” after furious French lobbying forced the EU to make late demands on the British.

David McAllister, a leading German MEP and Chair European Parliament’s Coordination Group, told Sky News that there would be “negative economic consequences” for German industry if the talks fail.

He was questioned on whether the impact on the German economy was “playing on Angela Merkel’s mind”.

Sky News host Stephen Dixon said: “Britain seems to be prepared, mentally on the political front, for a no deal. What would be the consequences for the EU?”

Mr McAllister, who is in Angela Merkel’s CDU party, said: “The no deal option would the worst option.

“If the UK leaves the customs union and single market, and not in an orderly way, we will have a sharp cut, a cliff-edge, that might mean we trade on WTO rules.”

JUST IN: Germany Brexit panic: 460,000 jobs linked to UK exports

Mr Dixon followed up: “The negotiating point from the UK is that at the end of the day, the EU won’t want to deal with those consequences, they will have to relent.”

Mr McAllister suggested that the UK would be “hit harder than the EU”.

He added: “The British side need to understand we have firm principles, including the protection and integrity of the single market, the functioning of the EU and avoiding a hard border in Ireland.”

Mr Dixon said: “There has been talk about the impact on Germany and the things like the car industry if we were to have a no deal exit, because of the extra tariffs.

Last night, a senior UK Government source told BBC political editor Laura Kuenssberg that the EU team were “bringing new elements into the negotiation” at the “11th hour”.

However an EU source dismissed this, telling the BBC “there were never any surprises or new demands” from their side.

During a briefing on Wednesday, the French ambassador in Brussels apparently told Mr Barnier that Paris would prefer to restart talks with the UK in 2021 rather than rush into a deal now.

France also told Mr Barnier that he was close to over-stepping his negotiating mandate, with one diplomat on Thursday even suggesting that the EU negotiator was treading “on the red line”.

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