BRUSSELS: The European Union launched a legal case against the United Kingdom on Thursday for undercutting their earlier divorce deal and a senior UK minister said differences remained in talks on a post-Brexit trade agreement.
Controversy over the Internal Market Bill has thrown the tortuous Brexit process into a new crisis while disagreements over corporate subsidies, fisheries and ways to solve disputes overshadow paralell trade negotiations.
“We had invited our British friends to remove the problematic parts of their draft Internal Market Bill by the end of September,” the head of the EU’s executive Commission, Ursula von der Leyen (pictured) said. “The deadline lapsed yesterday.”
With London not budging, she said the Commission started a so-called infringement, an EU legal procedure against countries that violate the bloc’s laws.
“At the same time, the Commission will continue to work hard towards a full and timely implementation of the Withdrawal Agreement. We stand by our commitments,” von der Leyen said.
London now has one month to reply to the Commission’s formal letter of complaint and even more time to change tack before the Brussels-based executive can sue at the bloc’s top court. The case could lead to hefty fines, but that takes years.
But sterling slipped 0.6% against the euro and the dollar after the case was announced. “A no-deal is looking more likely,” said Neil Jones, head of FX sales at Mizuho, who predicted further falls. Britain’s lower house of parliament approved the Internal Market Bill on Tuesday and it is now with the House of Lords.
The United Kingdom says ensuring that its nations can trade freely with each other after Brexit would require breaking the divorce deal provisions on the sensitive Irish border. A UK government spokesman said in reacting to the news from Brussels that Britain has “clearly set out reasons” to change its Brexit treaty provisions.
The EU is adamant, however, that it would not implement any new UK deal as long as London undermines the divorce treaty. With talks on the new trade agreement nearing crunch time, the EU’s 27 national leaders gathering in Brussels on Thursday and Friday would also get an update on the latest. — Reuters
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