Brussels plans to punish Britain if it refuses to sign up to new EU laws during the two-year Brexit transition period by stripping the UK of single market access.
Leaked EU documents show that the EU is plotting to draw up a punishment clause which could see planes grounded if the UK does not abide by all its regulations.
The revelation will infuriate Tory Brexiteers and is a major blow for Theresa May who was aiming to get a transition deal signed off by the end of next month.
Under the plans, Brussels will demand that Britain signs up to all new rules and regulations during the two -year transition.
It also wants to strip the UK of the right to challenge decisions made by EU judges in the European Court of Justice during the transition.
If the UK refuses then the Brussels club plans to hit back by blocking sectors from having access to the single market.
European Commission President Jean-Claude Juncker (R) larks about with European Parliament Brexit chief Guy Verhofstadt in Brussels today hours before leaked documents details EU’s plans to punish UK if we do not sign up to new Brussels laws during the two year Brexit transition
Mr Juncker players a prank on Mr Verhofstadt by ruffling his hair as he sits in front of him at the European Parliament in Strasbourg
A smiling Mr Juncker ruffles the hair of Mr Verhofstadt during proceedings at the European Parliament in Strasbourg
This could harm transactions in the City of London, hit cross border trade and stop British airlines from landing their planed in EU airports.
The hardline stance means Britain would have to swallow new EU laws without any right to challenge them, or face heavy punishments which would harm the economy.
Tory MP Jacob Rees-Mogg, head of the influential backbench group of Tory Brexiteers known as the European Research Group, hit out at the plan.
He told Mail Online: ‘The UK cannot accept ECJ jurisdiction if the EU itself will not.
‘I wonder if such an approach would not violate the EU’s own Charter of Fundamental Rights.’
The plans reveal that the EU is worried that Britain will break European law during the transition period.
They fear that the UK will lodge an objection to the law with the ECJ and try to wait out the two years by embarking on a lengthy legal challenge at the Luxembourg based court.
They believe this will create a loophole which will effectively let Britain dodge new rules and regulations f or the transition period – something hey are determined to block.
To stop this happening Brussels wants to create a way of punishing Britain by denying important and lucrative sectors of the economy access to the single market if we do not follow all the new laws.
Thankfully, Mr Verhofstadt saw the funny side of the joke during today’s meeting at the European Parliament
Mr Verhofstadt listens to Mr Juncker as they have a frank conversation at the European Parliament today
The colleagues share a handshake during their conversation, as it emerges that the EU plans to punish Britain if it refuses to sign up to new EU laws during the two-year Brexit transition period
The hardline stance is major blow for Theresa May (pictured in Manchester today)who was aiming to get a transition deal signed up to by the end of next month.
Brussels is insisting that Britain signs up to all EU laws and ECJ judgements during the two year transition period.
It states: ‘In addition, the Governance and Dispute Settlement Part of the Withdrawal Agreement should provide for a mechanism allowing the Union to suspend certain benefits deriving for the United Kingdom from participation in the internal market where it considers that referring the matter to the Court of Justice of the European Union would not bring in appropriate time the necessary remedies.’
Peter Ptassek, Germany’s top Brexit official, tweeted: ‘Now we are talking #transition! Straight forward draft by [the commission] provides the clarity the economy facing Brexit needs. Not so much time left to get a deal on this in March.’
But the move will meet with fierce resistance among Tory Brexiteers who have warned against allowing Britain to become a ‘vassal state’ during the two-year transition.
Brexit Secretary David Davis, the Brexit Secretary, has called for a clause to ensure that Britain will not be forced to implement laws against its interests.
But it looks as if that demand appears likely to be ignored by Brussels.