The prospect of the U.K. and European Union failing to secure a trade agreement after Brexit negotiations would be "unthinkable" and we can only live in hope that common sense prevails in the end, the deputy director at an influential Brussels-based think tank told CNBC on Wednesday.
"(From the EU's perspective) the U.K. cannot be seen to be doing better outside the EU (but) we must remember this is the U.K. we are talking about, this is not the archetypal enemy of the EU… we are still friends right?" Maria Demertzis, deputy director of Bruegel, told CNBC via phone on Wednesday.
U.K. Prime Minister Theresa May warned European leaders in January that no deal for Britain would be better than agreeing to a "bad deal" at the end of the two-year negotiating process. May has since secured the right to activate article 50 and begin the formal procedure of leaving the bloc although the market consensus is for Downing Street to wait until the end of March to do so.
"In Brussels, there are other priorities right now (such as European elections), and so we need to wait for governments, hopefully sensible ones, to be in place both in France and Germany. I just hope that the land that gave us common sense can prevail in the end… we can but hope," Demertzis added.
In the absence of an agreed trade deal, Britain would default to the tariffs and rules imposed by the World Trade Organization (WTO), which critics have warned would be disastrous for the U.K.