'It's tough as it is': IMF chief says 'wise' to extend Brexit trade negotiations amid coronavirus uncertainty

Negotiations over a Brexit trade deal should be extended to avoid adding to the uncertainty created across Europe by the coronavirus pandemic, the head of the International Monetary Fund has suggested.

It comes as the UK government faces escalating pressure to request an extension to the 11-month transition period – due to end in December – or risk barriers to exports and imports being erected if no deal is reached with the EU.

But Downing Street flatly rejected any prospect of delay, saying: “We will not ask to extend the transition period and if the EU asks, we will say No.”

Boris Johnson’s official spokesman said: “Extending the transition would simply prolong the negotiations, prolong business uncertainty and delay the moment we control our borders. It would keep us bound by EU legislation at a moment when we need legislative flexibility to respond to coronavirus.”

Asked about the prospect of no trade deal and no extension to the talks between London and Brussels, the IMF managing director Kristalina Georgieva said that due to “unprecedented uncertainty” caused by the covid-19 it would be “wise not to add more on top of it”.

She told the BBC: “I really hope that all policymakers everywhere would be thinking about [reducing uncertainty]. It is tough as it is, let’s not make it any tougher.”

Pressed again, she continued: “My advice would be to seek ways in which this element of uncertainty is reduced in the interests of everybody, the UK, the EU, and the whole world.”

Earlier this week, the IMF warned that it is “very likely” the global economy will suffer its worst recession since the Great Depression almost a century ago, but predicted a partial recovery in 2021.

The remarks from Ms Georgieva follow poll by BMG for The Independent that found some 47 per cent of the public want Boris Johnson to ditch his 31 December deadline for the conclusion of the Brexit trade trade talks and request an extension.

But No 10 has repeatedly insisted they are sticking to the New Year’s Eve deadline for a deal to be reached, and Mr Johnson has not yet removed his threat to walk away from the talks in June if no progress is made with Brussels.

According to a joint statement from both sides, the UK government’s chief negotiator David Frost held a “constructive” meeting with his opposite number Michel Barnier via videoconference on Wednesday.

“The two sides took stock of the technical work that has taken place since the first negotiating round on the basis of the legal texts exchanged by both sides,” they added.

“While this work has been useful to identify all major areas of divergence and convergence, the two sides agreed on the need to organise further negotiating rounds in order to make real, tangible progress in the negotiations by June.”

The statement added that a crunch meeting in June will “take stock of the progress made”. Under the terms of the withdrawal agreement, any extension to the transition period must be made by July.

The Scottish National Party’s leader at Westminster, Ian Blackford, said it was “beyond reckless” for the government to impose a hard Brexit deadline in the middle of the coronavirus pandemic.

“People, public services and businesses are already struggling to get by,” said Mr Blackford. “Imposing a Tory hard Brexit at the end of the year would deal another devastating blow at a time when our economy will need all the support it can get to recover.

“UK ministers must think again, do the responsible thing and request an extension to the transition period. It would be deeply irresponsible and completely unforgivable to put blind Brexit dogma ahead of the interests of the people and nations of the UK.”

Naomi Smith of the Best for Britain campaign said: “By attempting to complete talks with the EU at the same time as dealing with coronavirus, the government risks doing both jobs badly.

“Without a full trade deal, and without an extension to the transition period, the country faces a double whammy of a painful no-deal Brexit at the same time as a coronavirus-induced recession.

“That would be unfair on everyone who is currently making huge sacrifices, particularly businesses struggling to stay afloat while paying their employees.”

Source: UK Politics - www.independent.co.uk