EU Unveils Contingency Plans for No-Deal Brexit

European Commission President Ursula von der Leyen arrives at the EU headquarters prior to an EU summit, in Brussels, on Dec. 10, 2020. (John Thys/Pool/AFP via Getty Images)

The European Union set out “targeted contingency measures” on Thursday to prepare for the possible scenario of a “no-deal” Brexit, after UK and EU leaders failed to break the deadlock at a face-to-face summit in Brussels the night before.

“While the Commission will continue to do its utmost to reach a mutually beneficial agreement with the UK, there is now significant uncertainty whether a deal will be in place on Jan. 1, 2021,” the European Commission said in a statement.

The Commission said it was putting forward “a set of targeted contingency measures ensuring basic reciprocal air and road connectivity between the EU and the UK, as well as allowing for the possibility of reciprocal fishing access by EU and UK vessels to each other’s waters.”

British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen held talks over dinner in Brussels on Wednesday evening, but failed to make a breakthrough on post-Brexit trade relations.

UK Prime Minister Boris Johnson is welcomed by European Commission President Ursula von der Leyen prior to a working dinner at the EU headquarters in Brussels, on Dec. 9, 2020. (Olivier Hoslet/Pool/AFP via Getty Images)

“Negotiations are still ongoing. However, given that the end of the transition is very near, there is no guarantee that if and when an agreement is found, it can enter into force on time,” von der Leyen said on Thursday.

“Our responsibility is to be prepared for all eventualities, including not having a deal in place with the UK on Jan. 1, 2021. That is why we are coming forward with these measures today.”

The UK officially left the EU in January 2020 but the trading arrangements—such as tariffs and quotas—have remained unchanged during the Brexit transition period, which will end on Dec. 31.

If no trade deal with the EU is reached by then, Britain will default to trading with the 27 EU countries under World Trade Organization (WTO) rules.

The Commission urged “all stakeholders in all sectors” in the EU to prepare for all possible scenarios on Jan. 1, 2021, because “disruption will happen with or without an agreement between the EU and the UK on their future relationship.”

British business groups have warned that a no-deal Brexit would cause major disruptions to business and cause prices of essential goods to rise.

The Food and Drink Federation (FDF) told Parliament on Tuesday that the UK’s food supply chain could face disruption when the Brexit transition period ends.

Lily Zhou contributed to this report.