The EU needs to be realistic about the dangerous state of the Brexit negotiations and is preparing to deploy its trillion-pound budget to cushion the bloc from the prospect of a no-deal scenario, the European commission president has warned.



With the two sides still far apart on the “hardest issues”, just days from a crunch leaders’ summit in Brussels, Jean-Claude Juncker told the Irish parliament on Thursday he was stepping up preparations for a breakdown in talks, and even drafting plans aimed at keeping the peace in Northern Ireland.

The problem of avoiding a hard border with the Republic – said by the Irish taoiseach, Leo Varadkar, to be akin to a “riddle wrapped in an enigma” – is threatening to thwart all attempts to make progress on a wider deal.

With Theresa May refusing to countenance what Juncker described as the bloc’s “bespoke and workable solution”, of the Northern Ireland effectively staying in the customs union and single market, it was crucial for the 27 EU member states to prepare for the worst outcome, the commission president said.

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Juncker told Irish MPs and senators in a joint session of parliament in Dublin: “With pragmatism comes realism. As the clock to Brexit ticks down, we must prepare for every eventuality, including no deal. This is neither a desired nor a likely outcome. But it is not an impossible one. And we are getting ready just in case.

“We will use all the tools at our disposal, which could have a cushioning impact. The new long-term budget for our union from 2021 onwards has an in-built flexibility that could allow us to redirect funds if the situation arose.

“We will also earmark €120m (£105m) for a new peace programme which has done so much in breaking down barriers between communities in Northern Ireland and the border counties.”

Juncker has put Martin Selmayr, the commission president’s former chief of staff, who is now the European commission’s secretary-general, in charge of preparations for a no-deal scenario.

Selmayr has drawn up a series of legislative changes that would be needed in the event of the UK crashing out. He has even raised the unlikely prospect of requiring UK citizens to apply for a visa to visit EU member states.

A senior UK government source warned that a no-deal outcome would only suit the Russian president, Vladimir Putin. “If we were, God forbid, to get into the situation where you had a sour divorce and an acrimonious future relationship, I don’t think that does any good for anybody,” the source said. “That’s a complete lose-lose situation.

“The only people who’d have a smile on their faces are people in the Kremlin and elsewhere who wish European democracies ill.”

To avoid a border both on the island of Ireland and in the Irish sea, the British government has so far proposed that the UK as a whole effectively stays in the customs union for a limited period after Brexit, until a technological solution to the border issue emerges.

It is expected to further propose after next week’s summit of leaders in Brussels that the UK remains in regulatory alignment with the EU on goods, to ensure all border checks are unnecessary.

Juncker, however, told the Irish parliament the EU would not allow the UK to use the Irish issue to gain single market access without freedom of movement and membership of the full ecosystem of the bloc’s institutions, including the European court of justice.

He said: “Our backstop is a bespoke and workable solution. It is designed for Northern Ireland and upholds its constitutional status.

“But this tailored solution for Northern Ireland cannot fit the whole United Kingdom. It covers all necessary customs and regulatory controls to avoid a hard border. And it does not prejudice the future relationship between the UK and the European Union.

“With less than 10 months to Brexit, we need more answers and fewer new questions. We will continue – my friend Michel Barnier, myself and others – to take a pragmatic approach to finding solutions. But I also want to be clear: Ireland will come first.

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“There are those who think that the other 26 countries will abandon Ireland at the last minute for a sectoral deal that suits them. Those people have not understood what being part of our union means. Ireland’s border is Europe’s border – and it is our union’s priority.”

A senior UK cabinet source claimed the EU’s proposal failed to address the concerns of nationalist and unionist communities. “There have been some serious questions about what we have put on the table but it has not been rejected,” the source said.

“What is absolutely essential is that the approach that is agreed is demonstrably balanced and fair to both communities in Northern Ireland. No solution is going to ensure if it is going to be rejected by one community or the other.”

“Our objection to the commission text is that it was unbalanced,” the source added. “It is a mistake to think this is just about the DUP [Democratic Unionist party]. I know no member of the cabinet who would be prepared sign up to the commission text.”

Varadkar, at a press conference with Juncker, said he believed there was an “urgent need to intensify efforts” in order to achieve a withdrawal agreement.