October 25, 2018 / 2:00 PM / 8 months ago

ECB's Draghi: As Brexit talks drag on, private sector must prepare for no deal

European Central Bank (ECB) President Mario Draghi speaks during a news conference following the governing council's interest rate decision at ECB headquarters in Frankfurt, Germany, October 25, 2018. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - European Central Bank President Mario Draghi said on Thursday the longer Brexit talks drag on, the more the private sector will have to prepare for the possibility of Britain crashing out of the European Union with no deal on their future relations.

London and Brussels say they are close to an agreement, but they have yet to resolve their differences over the future of the Irish border, Britain’s only land border with the EU.

Draghi told reporters after an ECB policy-setting meeting he was confident that “a good, common-sense solution will be found where financial stability risks will be minimised”.

But he also outlined the growing problem that companies face as Britain’s March 2019 exit date nears with no clear idea yet for them on how Britain and the EU will do business in future.

“If this lack of outcome will continue and will approach the end date, the private sector itself will have to prepare on the assumption that there will be a hard Brexit,” he said.

“And that’s where things may be — I wouldn’t call it necessarily big financial stability risks, but certainly uneasiness, financial uneasiness in markets and financial intermediaries,” he said.

Reporting By Francesco Canepa; Writing by Hugh Lawson; Editing by Catherine Evans

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