Fisheries policy remains the biggest barrier to an agreement

¨An agreement must be in the interests of both parties, of British interests and also of the 27 members of the European Union", said Angela Merkel

 

German Chancellor Angela Merkel warned the EU today that it must be prepared for a potential failure scenario next year. "Unfortunately we have to prepare for the event, there will be no agreement," she said. "We also have to take account of reality - an agreement must be in the interests of both parties, of British interests and also of the 27 members of the European Union".

The UK's chief negotiator, Lord David Frost, is currently in the middle of intense negotiations with his EU counterpart, Michel Barnier.  The two biggest barriers to an agreement are differences over state subsidy regulations - as part of the level playing field negotiations - and EU access to UK fishing waters.