BERLIN, (Xinhua) — According to a report by Germany’s Federal Ministry of Finance, the German government is assuming that Britain will leave the European Union (EU) without a treaty, German newspaper Handelsblatt reported on Thursday.
Handelsblatt is quoting from the ministry report that sees a “high probability” for a disorderly Brexit on Oct. 31 and argues that EU member states must take the scenario of a no deal exit seriously because British Prime Minister Boris Johnson is insisting on an exit agreement without a backstop.
The backstop proposed by the EU would see the whole of Britain remain in the EU customs union and is consequently opposed by Brexit hardliners in the UK.
The German Federal Ministry of Finance is expecting Britain to create a “big moment” at the G7 summit in Biarritz at the end of August and to either announce the breakthrough or failure of the negotiations.
“Against this background, it is important from an EU perspective to stick to the previous line,” Handelsblatt quoted the ministry report.
Additionally, even if the backstop would be removed from the phase-out treaty, as British PM Johnson demanded, the German ministry was not sure that the British government would receive approval from the parliament.
In line with the German assessment, preparations for a disorderly Brexit on the German and EU sides would be “largely completed”, according to the ministry report.
Already, the German government has adopted more than fifty laws and measures in the event of a disorderly Brexit.
In the report, the finance ministry is listing transitional regulations in the area of taxes and finances such as an agreement on cross-border financial services between the German financial supervisory authority (Bafin) and the British financial conduct authority (FCA).
In the customs administration, a “selective increase in clearance and control effort” is to be expected. The German finance ministry is planning to absorb the extra work load by “flexible personnel deployment” and “IT-supported optimization”.