EU looks at extending Brexit transition period beyond 2020

EU leaders would take the initiative and request an extension to the transition period, keeping the UK under Brussels regulations beyond 2020, under a plan mooted for getting around Boris Johnson’s stated refusal to seek a delay.

The move is being considered by EU officials as a way out of the problem posed by the short time available to negotiate a new relationship and the prime minister’s insistence that he will not seek an extension beyond 11 months.

Related: Can Britain reach a trade deal with the EU by the end of 2020?

With a majority of 80 secured by the prime minister, the UK is expected to leave the EU on 31 January – in fewer than 50 days. At the end of the transition period on 31 December 2020, the UK is set to exit the EU’s customs union and single market and enter newly negotiated arrangements.

Ursula von der Leyen, the European commission’s president, said that negotiating a future relationship in such a short timeframe would be very challenging.

Speaking on Friday, at the end of a leaders’ summit in Brussels, she said the negotiations would instead have to prioritise key EU issues, such as the trade in goods and fisheries, and leave others for after 2020. Such a “sequencing” could leave arrangements for the UK’s financial services sector and the landing rights of British air carriers, among other issues, out of an initial deal.

Such a staged approach would be unwelcome in Downing Street and would, in itself, be difficult to complete given the clashes expected on both the UK’s future alignment with EU laws and the level of access to British waters given to European fishing fleets.

The withdrawal agreement stipulates that the transition can be extended by “one or two years” but that this must be agreed before 1 July next year. It is recognised in Brussels that Johnson will find it politically impossible to seek an extension to the transition to allow all the issues to be agreed.

On breaking his word by asking for a delay, Johnson would have to open negotiations on how much extra the UK would pay into the EU budget. Free movement of people would also continue.

Instead, it is understood initial discussions have taken place in Brussels about the EU asking the British government for an extension, given the complexity of the talks. It is likely that the EU would also need to sweeten the offer of an extension by minimising the costs that the UK would face.

Sources suggested that such a move might offer Johnson a better chance of gaining cabinet approval, and avoid a cliff-edge exit from the EU’s structures on 31 December 2020, including the imposition of tariffs.

The development highlights the difficulties facing the negotiators as they prepare for talks. The Dutch prime minister, Mark Rutte, said on Friday that he believed the negotiations in the next year would be far tougher than those over the withdrawal agreement.

Some EU capitals were left frustrated by Von der Leyen’s comments about the need to sequence the talks, believing it risked antagonising the UK.

Mujtaba Rahman, a former European commission official and now managing director for Europe at Eurasia Group, a political risk research and consulting firm, said: “The EU side hasn’t fully agreed how best to handle phase two and the big internal debate in Europe is about prioritisation. The commission wants to prioritise talks – akin to how it favoured sequencing in phase one ‪– and start with the areas where there’s no fallback, such as the free-trade agreement, level playing field and governance.

“But EU capitals do not, as member states, worry about pre-judging Johnson’s preferences and his ability to make difficult concessions if the things that UK wants aren’t on table at the outset, such as services.”