To avoid failure, the German Chancellor has told colleagues she believes wrangling over the future relationship pact could run until as late as Bonfire Night. This will leave the UK and EU with a month-long dash to complete the formalities before the post-Brexit transition period expires at the end of the year. Michel Barnier, the EU’s chief Brexit negotiator, has previously claimed October would be the “moment of truth” for whether a free-trade agreement between the two sides is possible.
A senior German diplomatic source said: “We need an agreement by the end of December, that means serious negotiations will have to be done by September and October at the latest – so far negotiations have just been treading water.
“We need a deal – hopefully in time for the European Council in the middle of October, and if we don’t have one there’s the possibility to extend into November, but this is really it.”
Before any Brexit deal can enter into force it must first be translated into the EU’s 23 working languages and ratified by both the European Parliament and the House of Commons.
National and regional parliaments across the bloc could also demand a final say on the agreement.
Mrs Merkel is set to play an influential role in the upcoming Brexit talks when she takes charge of the EU’s rotating presidency tomorrow.
Sources close to the Chancellor have said she wants the six-month period to be a “defining” moment in her almost 15-year stint as Germany’s top politician.
Mrs Merkel is understood to be confident about the possibility of a Brexit deal being struck before the end of the year.
But sources close to the German leader say she will urge Prime Minister Boris Johnson to show “more realism” at the negotiating table so she can broker a compromise between him and other EU leaders.
One source said: “Is it possible to get a deal? I think so but needs the UK to take a more realistic approach – less ideological, more pragmatic.
“On Brexit it always takes two to tango. It’s not just our willingness, we need to see more realism on the UK side.”
Signs of the Chancellor’s willingness to drag out the Brexit talks came after the Prime Minister’s chief negotiator said the process must be wrapped up this summer.
He will replace outgoing civil service boss Sir Mark Sedwill as National Security Adviser.
Trade talks are currently deadlocked as Brussels continues to demand continued access to Britain’s fishing grounds and a regulatory level-playing field, with a role for the European Court of Justice.
The opportunity for the transition period to be extended, for up to two years, will lapse today after Mr Johnson repeatedly warned the EU he would not delay Britain’s departure from the bloc’s single market and customs union.