EU chief executive: no post-Brexit deal without 'level playing field'

By Gabriela Baczynska and Robin Emmott

BRUSSELS (Reuters) - The European Union's chief executive, Ursula von der Leyen, said on Wednesday that the bloc will do its best to seal an agreement on new ties with Britain by the end of the year but will not compromise its core values, notably on fair competition.

Britain left the EU, the world's largest trading bloc, on Jan. 31 after 47 years of membership, to the huge regret of the EU, and there has been little progress on designing a new relationship with a year-end deadline looming.

"The negotiations with the UK always promised to be difficult and they have not disappointed," von der Leyen, the head of the European Commission, told the European Parliament.

"We are now halfway through these negotiations with five months left to go. But we're definitely not halfway through the work to reach an agreement ... We will do all in our power to reach an agreement."

She said British Prime Minister Boris Johnson had confirmed to her this week that London would not seek to prolong negotiations on a new EU-UK trade deal beyond December.

The EU says Britain cannot retain all the economic and trading benefits it had as an EU member, while London says Brussels is not showing enough flexibility.

"We're ready to be creative to find common ground," von der Leyen said.

But she went on to say said there could be no deal without "level playing field" guarantees of fair competition, and agreements on fisheries and on dispute-settling mechanisms.

"ADVANCE TOGETHER"

The EU insists that Britain must commit to maintaining EU standards on everything from state aid to labour to environment regulations to prevent it undercutting EU products in the future.

"It should be a shared interest for the European Union and the UK to never slide backwards and always advance together towards highest standards," von der Leyen said.

She also said Britain must offer legal guarantees that it would handle sensitive data on EU citizens correctly if it wanted access to the bloc's databases or close judicial and police cooperation.

Any deal sealed between the 27 EU states and Britain will eventually need ratification by the European Parliament. Some lawmakers called for preparations in case the talks fail.

"It's going to be difficult. It's possible but the time is very short," the bloc's Brexit negotiator, Michel Barnier, told the same hearing.

"It's the choice of the UK whether they want an agreement, or not, because the conditions for an agreement are already known."

Barnier said EU-UK talks will intensify through July, August and September, and called for a deal to cover not only trade but also security, environmental standards and welfare rights:

"Our priority is and remains to be to reach an agreement. But we also have the responsibility to prepare for all possible scenarios, whether there is an agreement or there isn't."

(Reporting by Gabriela Baczynska, Robin Emmott; Editing by Edmund Blair)