Johnson presses EU on Brexit

LONDON -- Prime Minister Boris Johnson pushed Britain closer to a no-deal exit from the European Union on Monday, insisting he will not hold Brexit talks with EU leaders unless the bloc lifts its refusal to reopen the existing divorce deal.

Johnson is trying to pressure the EU to give ground by intensifying preparations for the U.K. to leave in three months without a withdrawal agreement.

But the pound fell to a two-year low as business groups warned neither Britain nor the EU is ready for a no-deal Brexit, and no amount of preparation can eliminate the economic damage if Britain crashes out of the 28-nation trading bloc without agreement on the terms.

Johnson became prime minister last week after winning a Conservative Party leadership contest by promising the strongly pro-Brexit party membership the U.K. will leave the EU on the scheduled date of Oct. 31, with or without a divorce deal.

The EU struck a withdrawal agreement with Johnson's predecessor, Theresa May, but it was rejected three times by Britain's Parliament. Johnson is insisting the bloc make major changes to May's spurned deal, including scrapping an insurance policy for the Irish border rejected by U.K. lawmakers.

"The withdrawal agreement is dead, it's got to go," Johnson said Monday as he visited a submarine base in Scotland. "But there is scope to do a new deal."

He said he was "very confident" of getting a new agreement, even though Britain is due to leave the EU in fewer than 100 days, and the EU insists it won't reopen negotiations or remove the border "backstop."

Johnson has spoken to several EU leaders by phone since he took office but has no meetings scheduled. His spokeswoman, Alison Donnelly, said he would not agree to negotiations unless the bloc lifts its refusal to change the withdrawal agreement.

"He remains confident that the EU will stop claiming that the withdrawal agreement can't be changed," she said.

If they don't, she added, "we must assume there will be no deal on the 31st of October."

Before he took office, Johnson said the odds of Britain leaving the EU without a deal were a million to one.

At one point Monday, the pound had fallen by nearly 1.5% to trade at $1.2214, its lowest level since March 2017.

The pound's woes illustrate concerns in the markets over a no-deal Brexit. Economists warn leaving the bloc without an agreement on terms would disrupt trade by imposing tariffs and customs checks between Britain and the bloc. The British government's financial watchdog says that could send the value of the pound plummeting further and push the U.K. into recession.

The Confederation of British Industry, the country's biggest business lobby group, urged both Britain and the EU to accelerate Brexit preparations. It made 200 recommendations, including new laws, new IT systems and agreements to temporarily maintain some common regulations.

But it said "the unprecedented nature of Brexit means some aspects cannot be mitigated."

"It's like putting sandbags down for a flood. Your kitchen's still going to be underwater but maybe we can save the bedrooms upstairs," the group's head of EU negotiations, Nicole Sykes, said.

Another warning came from French automaker PSA, which said it could move production of its Vauxhall Astra model out of Britain if Brexit makes it unprofitable. Chief executive Carlos Tavares told the Financial Times doing so would mean closing Vauxhall's Ellesmere Port plant in Wales, which employs 1,000 people.

Johnson, contradicting the opinion of most experts, has said leaving without a divorce deal will be "vanishingly inexpensive" if Britain is properly prepared.