No-Deal Brexit Risk Grows After EU Rejects Boris Johnson’s Demands

Robert Hutton and Joe Mayes
No-Deal Brexit Risk Grows After EU Rejects Boris Johnson’s Demands

(Bloomberg) -- The enormity of the challenge facing Boris Johnson to break Britain’s political deadlock was laid bare in his first days as prime minister, as the European Union immediately rejected his demands for a better Brexit deal.

Johnson told European Commission President Jean-Claude Juncker that the U.K.’s Withdrawal Agreement with the EU would have to change for it to pass Parliament, according to his office’s account of the phone conversation between the two Thursday. Juncker said it was the best and only deal possible.

We’re Getting an Idea of Boris Johnson’s Plan A: Deal, Then Election

If neither side backs down, Britain will be on course to drop out of the EU on the exit day deadline of Oct. 31 with no agreement in place to ensure smooth cross-boarder trade and orderly markets. That could trigger delays at ports, shortages of essential supplies including medicines, difficulties with transactions of all stripes, and a recession.

Before the call with Juncker, Johnson used his first appearance in Parliament as prime minister to pledge to “turbo-charge” preparations for a no-deal Brexit and hint he’s mulling an election, gambling on taking the hardest line he can with the EU.

"In the 98 days that remain to us we must turbo-charge our preparations to make sure that there is as little disruption as possible to our national life," Johnson said. "I believe that is possible with the kind of national effort that the British people have made before and will make again."

Call to ‘Mobilize’

That talk of “national effort” seemed to be an attempt to channel Johnson’s hero Winston Churchill. The martial language continued, as the prime minister said he wanted to “mobilize” government staff to prepare. The work is to be the “top priority” of Michael Gove, and new Chancellor of the Exchequer Sajid Javid will deliver “all necessary funding.” Johnson’s office also pledged a public information campaign to help prepare the nation for the possibility of a no-deal departure.

“I would prefer us to leave the EU with a deal,” said Johnson, who is opposed to the “backstop” guarantee for the Irish border in the existing Withdrawal Agreement. “We will throw ourselves into these negotiations with the greatest energy and determination and in the spirit of friendship.”

But he said the EU would have to “rethink their current refusal” to reopen talks on the agreement that May reached, and that Parliament has rejected three times.

The prime minister appeared to rule out minor cosmetic changes. “A time limit is not enough,” he said. To clinch the deal, “it must be clearly understood that the way to the deal goes by way of the abolition of the backstop.”

The so-called backstop guarantee is a part of the Brexit deal that Theresa May negotiated with the EU last year, designed to ensure there is no hard border between the Republic of Ireland and Northern Ireland.

Johnson and his pro-Brexit allies argue the backstop traps Britain indefinitely in the EU’s customs rules, negating the point of leaving the bloc. The EU says it’s vital to avoid the return to checkpoints on the border that could undermine the peace on the island of Ireland.

Juncker wasn’t the only senior EU figure to hit back at Johnson. The bloc’s chief Brexit negotiator, Michel Barnier, sent a strongly worded email to European diplomats, describing Johnson’s first appearance in Parliament as “combative,” and called his demand to scrap the backstop “unacceptable.”

Yet Johnson faces obstacles to forcing through a no-deal split. Members of Parliament opposed to leaving without an agreement say they have the votes in the House of Commons to stop it. That seems likelier after Johnson fired more than half of May’s cabinet -- these former ministers could feel liberated to rebel against him.

Johnson could be forced to call an election to break the deadlock, and his allies have been weighing up their options for an early poll. On Thursday, he further fueled speculation of a snap vote.

Political Calculus

He delivered his attack lines against the opposition Labour Party with more vigor than he’d had for his own statement. And then later he dropped another hint that his mind is on an election, either before or after Brexit.

During the debate, Johnson told the Scottish National Party’s Ian Blackford that his policies were "not the basis on which to seek election" in Scotland. “We will win on a manifesto for the whole U.K.,” the prime minister added.

The comment suggested Johnson sees delivering Brexit as the first step toward calling an election, with the goal of getting his own mandate and winning an outright majority in Parliament, which he currently lacks. If things don’t go as he hopes, he might have to bring that plan forward.

In other developments:

Johnson made his first meaningful policy move as prime minister, saying 20,000 new police officers would be recruited over the next three yearsJohnson made various lower-level ministerial appointments to the government but influential Brexiteer Steve Baker turned down the offer of a job

--With assistance from Nikos Chrysoloras.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Joe Mayes in London at jmayes9@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Caroline Alexander

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