'No deal' not an option for Brexit: EU's Barnier

The EU's top Brexit negotiator Michel Barnier warned Britain Thursday there were no grounds for walking away without a deal, a scenario that would only harm the UK's interests.

"No deal would make a lose-lose situation even worse ... in my mind, there is no reasonable justification for a no-deal," Barnier said, referring to recent suggestions by British ministers that London could go its own way if the talks fail.

"A fair deal is far better than no deal," he told an EU panel on Brexit, repeating the phrase twice in English.

Britain and the EU began the formal Brexit talks last month based on Barnier's timetable of dealing first with the rights of more than three million EU citizens in Britain, and more than one million Britons living in Europe.

Then follows the thorny issues of Britain's estimated 100-billion-euro ($112 billion) exit bill and future of the border between Northern Ireland and the Republic of Ireland, which remains in the EU.

Only once "sufficient" progress has been made on these issues, will the European Union consider London's demand for talks on its future relationship with Brussels, including all important trade arrangements.

Barnier told the panel the EU would make no compromises on this agenda, insisting repeatedly that Britain could not expect to cherry-pick its ties with the bloc as many British politicians say it should.

"There can be no sector-by-sector participation in the Single Market. You cannot be half in and half out," he said.

Barnier said the EU has been very clear on these issues but "I am not sure they have been fully understood across the Channel."

"The decision to leave the EU has consequences and we have to explain... these consequences," he said, citing the example of British firms exporting to the EU facing increased customs checks which could take days rather than hours, as is the case now. 

Prime Minister Theresa May's spokesman said that it "wasn't new that some on the EU side have strong feelings" about Brexit, but that both parties would benefit from a trade deal.

"We're just at the beginning of the negotiations, but I would say that the most frictionless possible trade between the UK and the EU is clearly in the interests of both sides," he said.

"We want a comprehensive free trade agreement and a new customs agreement."

Barnier has previously warned that the negotiations must be wrapped up by October 2018 to allow time for all parties to ratify a final accord by March 2019.