The UK and European Union are locked in talks over a deal on their future relationship with each daring the other to blink just two days before Boris Johnson’s deadline for abandoning the negotiations expires.

Neither side believes the other has offered enough for talks to reach a conclusion, with the British government deriding the EU for its hard-line stance on fisheries and the EU calling for the UK to cede ground in other key areas such as business subsidies.

The deadlock is set to continue on Wednesday when Johnson and European Commission President Ursula von der Leyen discuss the impasse on a video call. The prime minister has said he will walk away from the negotiations if there is no clear progress by Thursday, when EU leaders hold a summit in Brussels.

“We want an agreement,” German Chancellor Angela Merkel told a virtual EU conference on Tuesday. “But we also have to take into account the reality: an agreement has to be in the interests of both parties, in British interests as well as the interests of the 27-member European Union.”

Failure to secure an accord would see Britain leave the single market and customs union at year-end without a trade deal in place, triggering disruption and additional costs for millions of businesses and consumers already reeling from the coronavirus pandemic.

No fear

Speaking to a meeting of EU European affairs ministers in Luxembourg on Tuesday, the bloc’s chief negotiator, Michel Barnier, said not enough progress has been made in the talks for them to enter the so-called tunnel, the intensive final phase, according to officials close to the discussion.

A spokesman for Johnson responded by saying the UK is ready and willing to leave the single market without a deal, an outcome which he said holds no fear.

A British official, speaking on condition of anonymity because the talks are private, said the EU had run the clock down deliberately and now needed to up the pace and inject some creativity to save the deal. The official also expressed frustration at the EU’s position, saying the UK has moved a long way since the beginning of the year.

One of the key obstacles to a deal remains what access EU boats will have to UK fishing waters. France is seeking the same rights it enjoys today under the EU’s Common Fisheries Policy — something the British government has rejected.

On Tuesday, an official in President Emmanuel Macron’s office warned that sacrificing the country’s fishing industry to secure a wider trade accord would be out of the question, while the country’s foreign affairs minister, Jean-Yves Le Drian, told lawmakers that a no-deal Brexit looks likely at this point.

The EU says that before it can contemplate making any compromises on fish, the UK has to offer concessions on the so-called level playing field for business, including setting out what its state-aid policy will be. The bloc is anxious to prevent British firms from gaining an unfair advantage over their European competitors.