Angela Merkel tells EU to prepare for no trade deal Brexit

Angela Merkel said the EU should be prepared for a no trade deal Brexit on Wednesday, the day after Boris Johnson warned the German chancellor that Britain was "ready" to walk away without an agreement.

"I will continue to push for a good solution, but we should also prepare for a possible no deal scenario," Mrs Merkel said in the European Parliament in Brussels.

"Progress in negotiations so far has been slim, to put it diplomatically," she said as she set out plans for Germany's six-month EU presidency.

Mrs Merkel added: "We've agreed with the United Kingdom to accelerate the pace of talks to reach an agreement by autumn, an agreement that could be ratified by the end of the year."

Mr Johnson has been adamant that he will not allow the discussions to drag on into the autumn, arguing that British businesses and citizens need certainty on the way forward before then.

On Tuesday, the Prime Minister told Mrs Merkel that the UK "would be ready" to leave the transition period at the end of the year on Australian terms – the Government's preferred expression for leaving without a trade deal.

A Downing Street spokesman said: "On the future relationship, the Prime Minister underlined the UK's commitment to working hard to find an early agreement out of the intensified talks process.

"He also noted that the UK equally would be ready to leave the transition period on Australia terms if an agreement could not in the end be reached."

Ursula von der Leyen, the president of the European Commission, told MEPs in Brussels: "We will do our utmost to ensure that an agreement can be reached with the United Kingdom."

Michel Barnier, the EU's chief negotiator, is in London for talks this week during a month of intensified negotiations.

Last week's round of negotiations in Brussels broke up a day early with the sides unable to bridge their differences over fishing, the "level playing field" guarantees and the future role of the European Court of Justice.

Mr Barnier met David Frost, his UK counterpart, for a dinner of halibut in Downing Street on Tuesday night.  He said on Wednesday that he had a "nice dinner" and "useful discussion" with Mr Frost, and that negotiators were "working hard for a fair agreement".

In Brussels, Mrs Merkel said the coronavirus pandemic was the greatest challenge the EU had ever faced.

“We are all aware that my visit today is coming at a the time when the European Union is facing its greatest challenge, ever. The global pandemic has hit people hard in Europe. Over 100,000 lives have been lost in Europe alone,”she said.

“Many citizens were not able to visit loved ones because of strict quarantine rules or bid farewell to them as they passed. We must bear that in mind when we commit to economic recovery.”

Mrs Merkel said, “We need to mourn our dead and recognise the pain of farewells that were not possible.”

EU leaders will meet on July 18-19 for tough talks over a €750 bn recovery fund and €1.1 trillion EU budget, which the European Commission has called for to kickstart the economy after the pandemic.

“Europe will only emerge from the crisis stronger than ever if we are willing to overcome our differences and identify shared solutions,” Mrs Merkel said.