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Brussels sources said the bloc is closely examining its “governance” position to ensure that any future relationship pacts with the UK are unbreakable. Michel Barnier is said to be evaluating a much stricter framework to enforce the terms of any deal reached before the end of the year. The move comes after the prime minister issued legislation that would give ministers the power to ignore EU customs controls and state aid rules in Northern Ireland.
Despite the provocation from London, the head of the European Commission, Ursula von der Leyen, still believes that a deal is possible.
EU diplomats have hinted that the bloc could even accept less stringent playing field regulations if a stronger enforcement measure is found.
A diplomatic source said: “If we want to move forward, we may need less content on a level playing field, but then a rock solid governance system is absolutely necessary.
“I think the events of the last week have proven its importance, and there is a general feeling among member states that it is even more important.”
The final governance structure is likely to implement a series of mini-agreements on goods trade, security and fisheries, in one framework.
The bloc wants a transversal mechanism that allows infractions to be punishable in different areas of the treaty from where any breach can occur.
Ms Von der Leyen said today that the bloc’s legal dispute with Britain over breach of the divorce agreement will remain separate from trade negotiations.
She said, “I’m still convinced that it can be done.”
European sources have welcomed suggestions from Downing Street that its internal market bill could be watered down to quell a conservative rebellion over plans to violate international law.
An EU diplomat said: “We should not overreact.
“We will continue negotiations because there are two separate tracks: one is the one the UK has decided to violate and the other is the future relationship.”
Issue 10 published a policy document suggesting that ministers would first exhaust the dispute mechanisms within the Withdrawal Agreement before opting to invalidate the treaty.
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But Brussels is confident that as progress is made in future relationship talks, the impact of the controversial legislation will be less apparent.
An EU diplomat said: “It is quite surprising that in the midst of an unprecedented economic and health crisis, the UK government has made everyone talk about VAT and customs declarations in the Northern Ireland Protocol.
“If negotiations on future arrangements can be successfully concluded, the problems with the Protocol will also collapse.”
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