BRUSSELS—The European Union delivered an ultimatum to Britain on Thursday, demanding it withdraw a proposal before British lawmakers that would breach the Brexit divorce agreement the two sides signed late last year.
The EU demanded that U.K. Prime Minister Boris Johnson’s government withdraw the proposal by the end of the month. If that doesn’t happen, the bloc could take legal action or halt talks over future relations between the two sides, officials said.
The proposal before British Parliament would allow ministers to override clauses in the divorce agreement aimed at preventing a border from arising between the British province of Northern Ireland and EU member Ireland. This was done to avoid inflaming sectarian tensions on the island.
With British officials signaling they won’t row back, the dispute appears to significantly increase the possibility that negotiations on a trade deal to structure post-Brexit EU-U.K. economic ties could end without agreement. The pound fell by more than 1% against the dollar after the EU issued the statement.
The EU statement followed a hastily organized meeting between EU and U.K. officials in London on Thursday to discuss the implementation of the agreement.