| What's happening? Failure is now a real option as negotiations take a dramatic turn for the worse. Think back 48 hours. On Wednesday, British and European Union officials were cautiously hoping that Boris Johnson and Ursula von der Leyen might be able to achieve a breakthrough of sorts at a Brussels dinner. Just one day later, though, the U.K. prime minister appeared on television, warning business and the public to prepare for life at the end of the year without a U.K.-EU trade deal. Read More: How Britain and the EU Would Trade Under WTO Rules Even so, the negotiators are back at work, and, as one EU official noted, Johnson hasn't actually called off the talks. It's typical for EU discussions to appear to be at the point of falling apart moments before a deal is finally struck. Negotiators are well-versed in brinkmanship and know any last-minute concessions have to be made to look big. That may be cause for optimism. But there are reasons to think the risk of failure has got materially bigger in recent days. Firstly, the issue of sovereignty. The EU says that, in return for a no-tariff trade agreement, the U.K. will need to keep up with its changing regulations. That is aimed at protecting the integrity of the EU's single market, and is something Boris Johnson refuses to do. This is not a simple issue that can be resolved by haggling over numbers. It goes to the heart of Johnson's vision for Britain. Many in his own Conservative party wonder what is the point of Brexit if not the freedom to break with EU rules? Secondly, the EU's attitude appears to be shifting. One official said it's possible that the two sides could agree on a "friendly no-deal," put in place some reciprocal contingency measures, and resume trade talks in 2021. The bloc published its plan on Wednesday for how it will keep planes in the sky and trucks rolling in the event of no deal — something chief negotiator Michel Barnier had long resisted. Is this a sign the EU has now made the mental adjustment to the prospect of Britain leaving without a deal?  Thirdly, time is running short. Really. The transition period ends on Dec. 31, which is 13 working days' time. Even if the differences could be resolved, negotiators may no longer have the hours available. The consequences of failure would be dramatic — as Joe Mayes sets out here — and neither side wants to attract the blame for pulling the plug on the talks. Johnson's threats may be another exercise in brinkmanship, an effort to persuade Angela Merkel and Emmanuel Macron to compromise. The risk is that one side, or both, are making dangerous miscalculations. Brexit in BriefWatch Bloomberg Quicktake, our new streaming news service with a global view and an informed take. Click here for the latest maps and data on the spread of coronavirus. Sign up here for our coronavirus newsletter, and subscribe to our podcast. Want to keep up with Brexit?You can follow us @Brexit on Twitter, and listen to Bloomberg Westminster every weekday. Share the Brexit Bulletin: Colleagues, friends and family can sign up here. For full EU coverage, try the Brussels Edition. Like getting the Brexit Bulletin? Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and gain expert analysis from exclusive subscriber-only newsletters. | 
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