VIENNA (Sept 7): British Finance Minister Philip Hammond said on Friday he was sure Britain will reach an agreement with the European Union on its exit from the bloc by an informal October deadline, in contrast to growing expectations of a no-deal Brexit.
The EU's chief Brexit negotiator Michel Barnier has said the bloc must prepare for a no-deal Brexit, and Germany is preparing for all scenarios including that one.
Hammond himself has warned of the economic damage that not having a deal in place by March, when Britain is due to leave, would do.
"I believe we will be able go get a deal. It's very much in the interests of the EU 27 as well as the UK that Brexit runs smoothly next March," Hammond said as he arrived for a meeting of EU finance ministers in Vienna.
When asked if that was still likely to happen by October, he added: "I'm sure we'll get there."
Hammond said he believed the Chequers plan — named after the British prime minister's country residence where it was thrashed out among cabinet members — would form the basis of that plan.
The Chequers plan has come under fire from hard-line Brexit supporters for being too conciliatory towards the EU, and a widely held view in the rest of the bloc is that it amounts to cherry picking and is therefore unacceptable because it aims to keep Britain in a common market for goods but not services.
Barnier said last month he would not agree to anything that weakens the single market, adding: "There is no single market a la carte."
Diplomats in Brussels have said that the October deadline is likely to be missed and that European Union leaders will probably have to hold an emergency summit on any Brexit deal in November.
"I believe we can deliver an agreement based on the Chequers plan that we've put forward," Hammond said. "That's why I'm here today, to engage again with my colleagues across Europe, to explain to them the details of the plan."
A no-deal scenario would be more harmful to Britain's economy than to the rest of the EU but it is still not the most likely outcome, Dutch bank ING said in a research note.
"A no-deal still looks very likely to be avoided, though October has already been abandoned as a deadline," it said.