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.
The 27 remaining member states want to be able to act against the UK without having to go through the potentially lengthy process of bringing cases to the European court of Justice, should Brussels come to the judgment that Britain has infringed EU law.
The EU’s leaked position paper, entitled Transitional Arrangements in the Withdrawal Agreement, lays out in legal language the EU’s terms for the transition period.
Member states want the EU to have the power to impose sanctions on the UK during the transition period after leaving the bloc if London violates agreed rules.
British newspaper The Guardian, which obtained the leaked document, claims “restrictions on single market benefits could be applied if it would take too long to take Britain to the European court to settle a dispute”.
The draft text has not been mentioned so far as part of negotiations to thrash out the terms of the divorce between Britain and the EU.
The development will inevitably increase pressure on Prime Minister Theresa May who has been criticised for being too accommodating to EU demands.
As it stands during the 21-month transition period the UK will effectively stay in the single market and customs union without any say on new regulations.