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The EU is considering whether to categorise a no-deal Brexit as a major natural disaster akin to flooding, fires or earthquakes, a move that would release emergency funds to the member states most affected.
The plan would allow EU officials to distribute cash from the bloc’s solidarity fund, set up in 2002 in response to that year’s severe weather. About €500m (£450m) can be accessed every year but unspent cash from the previous year is also available if required.
The proposal highlights the contrast between the preparations being made by the EU and those of the UK government, which has been criticised for underplaying the likely economic damage caused by no deal.
The Irish government has already been promised extra cash if the UK crashes out without a deal. The country’s central bank warned this year that a no-deal Brexit could result in 34,000 fewer jobs in Ireland by the end of next year and more than 100,000 over the medium term.
But countries including Belgium, the Netherlands, Germany, Denmark and Spain will also face severe challenges in the parts of their economy most reliant on British trade.
Details of the proposal, which will be discussed this week by EU diplomats, emerged as Austria’s foreign minister, Alexander Schallenberg, said the bloc would keep open the possibility of an extension to the UK’s membership beyond 31 October.
Schallenberg said: “Of course our thread of patience doesn’t go on forever. But in the past two years, we have put in a lot of energy to make an orderly exit possible.
“Secondly, a disorderly exit would have many consequences that we can not foresee in its entirety when it comes to financial flows and services.
“The EU’s attitude is reasonable, our doors are open, our hands are stretched out. We are ready to talk to the British, but the British also have to tell us what they want. Not the EU, only Boris Johnson knows what it takes to get this treaty through parliament. Just to say the backstop for Northern Ireland has to go is not enough.”
As the so-called “rebel alliance” in the Commons seeks to force Johnson to request an extension rather than crash out on Halloween, Schallenberg said the EU would not preempt Downing Street by making an offer.
He said: “We need a request from the British. It is unthinkable that the EU will force a member state to stay longer, so to speak, against its will. We have postponed the withdrawal date twice at their request.”
Johnson’s chief EU adviser, David Frost, is expected in Brussels on Wednesday and Friday. The prime minister is insisting that the EU removes the Irish backstop from the withdrawal agreement but the UK government is yet to offer any alternative plan for avoiding a hard border on the island of Ireland after Brexit.
The prime minister has instead claimed that the British government will not pay its £39bn divorce bill unless a new deal is negotiated and ratified.
The EU responded that such move would stymie any hope of talks on a free trade deal in the foreseeable future.
Schallenberg said: “We expect – and I underline this in triplicate – that the United Kingdom will fully meet its financial obligations as a member, whether or not there is a hard Brexit.
“The UK will also have to consider what kind of signal that would be for future contractors outside the EU if it ignores its obligations as soon as things get tough.”
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