Growing fears that Brexit talks are set to collapse

There were warnings of a "no deal" Brexit in Dublin, London and Brussels on Sunday as fears grow that the EU-UK talks will fail to reach agreement on the terms of the UK's exit from the union.

Taoiseach Leo Varadkar said he was optimistic a deal would be reached but also warned Ireland needs to make preparations for a situation where Britain crashes out of the union in 2019.

Mr Varadkar's comments come as hard Brexiteer members of Theresa May's cabinet in London urged her to prepare for a "no deal" outcome from the talks. The warnings from foreign secretary Boris Johnson and Michael Gove were contained in a leaked letter published on Sunday.

And in Brussels, the EU's chief negotiator, Michel Barnier, has said the EU is drawing up contingency plans for the possible collapse of Britain's departure talks.

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Speaking in Enniskillen, where he was attending the Remembrance Sunday ceremony, Mr Varadkar said he was "not afraid" of a no-deal Brexit which would most likely entail tariffs on many goods exported to the UK and some sort of a customs border between the North and the Republic.

Different paths

"I think it is going to be possible to come to an agreement with the United Kingdom on an EU exit treaty. But if it is the case that there can't be a deal, that is something we need to be prepared for as well," Mr Varadkar said.

"As I said in my speech at the Fine Gael conference, four times in Irish history we went on a different path when we became independent, when we became a republic, when we floated our own currency, when we joined the euro and Britain did not," he added.

“On each occasion we emerged more prosperous and stronger as a result. So I am not afraid of the possibility of there being no deal. But I am an optimist. I do think one is possible and will be achieved.”

Asked about the nature of the Government’s preparations for a no-deal Brexit, a Government spokesman said that “Contingency planning continues for all possible outcomes.”

Last month, Mr Varadkar said the Government would not be preparing for a hard Border on the island when it was opposed to any such development and was actively seeking to avoid it.

Possible collapse

However, as the Brexit negotiations enter a crucial few weeks, the possibility of a collapse of the talks is gaining currency in London and Brussels.

EU leaders meet in mid-December to assess whether sufficient progress has been made in the first phase – on Irish issues, the UK’s Brexit bill and citizens’ rights – to allow the second phase, which includes arrangements for the future trading relationship and the transition period, to begin. A repeat of the decision of EU leaders at last month’s summit to block progress to trade talks could cause the talks to collapse completely, observers fear.

But the EU has made clear the British side must give further concrete assurances of their willingness to meet the UK’s financial obligations to the EU before any progress can be made.

Mr Barnier, who last week gave the UK a two-week deadline to provide greater clarity on the financial settlement it was prepared to offer, told France's Journal du Dimanche newspaper the failure of the talks was not his preferred option. "But it's a possibility," he said. "Everyone needs to plan for it, member states and businesses alike. We too are making technical preparations for it. On March 29th, 2019, the United Kingdom will become a third country."