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Lorries parked at the port of Dover, England
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Both the Bank of England and the public spending watchdog sent warnings this week about the ability of the U.K.’s government and businesses to smooth the exit of Britain from the European single market on Dec. 31.
- The National Audit Bureau said Friday in a report that British ports have not yet integrated or tested crucial IT systems for the day when exporters and importers will have to fill customs forms and safety declarations.
- Meanwhile, transit areas for lorries that will have to wait and go through new controls are not ready, and the abrupt transition will be made worse by the lack of customs sites and agents, the report notes.
- “The increasing time pressure and risks mean that the government is committing a lot of money to progress preparations in areas, such as port infrastructure and customs intermediaries, which would traditionally be provided by the private sector,” the report notes.
- The Bank of England said Thursday in its monetary policy report that even if a trade deal is signed with the European Union in the coming days, major disruptions are expected at U.K. borders, and noted that many businesses have not yet prepared for the complexities of life after Brexit.
- The U.K. government and private businesses have embarked on a hiring spree of 50,000 new customs agents and specialists to deal with the exit from the Union. That’s more than the number of employees of all EU institutions combined.
- According to Sky News, chief EU negotiator Michel Barnier wrote in a confidential memo to EU governments that Britain is trying to run down the clock and ”blocking” progress in key areas.
The outlook: A trade agreement would make the transition easier, but after two weeks of intensified negotiations and 10 months of prior talks, the two sides do not seem closer to a conclusion. A treaty must be concluded within days in order to be ratified by Parliaments by the end of the year.
The U.K. economy will be Europe’s worst-hit by the coronavirus pandemic, as confirmed this week by the European Commission’s economic forecasts. It would sink further in the scenario of a so-called no-deal Brexit, but brinkmanship could nonetheless lead to that punishing outcome.
