The UK and the European Union (EU) have yet to reach a deal on Britain’s future relationship with the trading block, despite mounting crises on both sides of the negotiations.

Whatever result is reached will prove to be a staging post for deepening trade and military conflicts between Europe’s rival imperialist powers and pave the way for a fresh assault on workers’ living conditions in Britain and throughout the continent.

After talks between the UK’s chief negotiator David Frost and his EU counterpart Michel Barnier were called off again last Friday evening, Prime Minister Boris Johnson and European Commission president Ursula von der Leyen held a phone call Saturday. A joint statement acknowledged that “significant differences remain” and announced that “a further effort should be undertaken by our negotiating teams to assess whether they can be resolved.”

Negotiations resumed Sunday and Monday, but both sides reported “no tangible progress”. In a second phone call between Johnson and von der Leyen Monday evening, the pair agreed to an in-person meeting this week to discuss the “remaining differences”. That meeting takes place today.

By law, Britain leaves the European Union and its common market at midnight on December 31. If there is no deal in place, the UK and Europe will begin trading on World Trade Organisation terms, requiring tariffs, quotas and customs checks.

For workers to take up a fight for their own interests in this unfolding crisis, it is necessary to cut through the endless government propaganda and media chatter to the real class interests at stake.

The focus of the negotiations makes clear the wholly reactionary character of this falling out between imperialist powers utterly hostile to the interests of Europe’s workers.

The two sides’ most fundamental difference is over the so-called “level playing field” and the means of enforcing it. EU member states are formally bound by laws enforcing worker and environmental protections. But these protections, the product of decades of struggle by the working class, have already been massively eroded since the onset of globalisation and the turning of social democratic parties and trade unions into direct agents of the corporations. With the intensification of the global crisis of capitalism, especially since the 2008 financial crash, and the global turn to trade war, the ruling class everywhere is seeking to destroy whatever remains of these protections to ensure global competitiveness.

The Brexit vote—spearheaded by the most rapacious sections of the British ruling elite, on a programme of transforming the UK into an unregulated “Singapore-on-Thames”—is intended to give Britain a head start in this race to the bottom. The Johnson government is seeking to push this advantage and position the UK as a global freebooting economy while still maintaining easy access to the EU’s enormous common market that accounts for over 40 percent of its trade, allowing British capitalists to make huge gains through the super-exploitation of their workforces. This is most nakedly expressed in its push to establish deregulated “free ports”—a longstanding aim of Chancellor Rishi Sunak—with the bidding process for new sites beginning last month, and the first due to open at the end of next year.

The EU is working to block this strategy until it can accelerate its own destruction of remaining social protections and compete on Britain’s cut-price level. Its negotiators insist that Britain must maintain a “regulatory alignment” with the EU on pain of heavy tariffs and taxes and strict quotas. Europe’s leading powers, France and Germany, have made clear their unanimity on this issue.

EU members also face limitations on providing state aid to private businesses, as a means of enforcing market competition—another component of the “level playing field” demanded by Europe. These measures are being undermined by the global drive to protectionism and nationalism exemplified by Brexit. Britain intends to break free of these limitations.

Completely unmentioned in the negotiations or their coverage in the media are conflicts over foreign and military policy. France has emerged as a hardliner in talks with UK, which reflects its push for Europe to develop “strategic autonomy” from the United States. With Britain long functioning as American imperialism’s point-man in Europe, France views a UK in a close relationship with Europe but with far looser controls on its actions as antithetical to its own economic and military ambitions on the continent.

Despite these fierce conflicts, neither side wants to force a break, instead relying on brinkmanship to extract concessions from the other. On Monday, Johnson promised not to break international law with its Internal Markets Bill—which reneges on previous legal agreements with the EU over the Northern Irish border and is due to be voted into law this week—if a deal was reached. Yesterday, the British government announced that it would drop the illegal clauses in the bill after reaching a specific agreement with the EU on Northern Ireland, in what is widely considered a climbdown by the UK.

The EU pushed its advantage Tuesday by announcing it would be prepared to continue talks into the New Year. This would involve Britain crashing out of the union without a deal in place on January 1, causing huge economic damage and placing the UK government under immense pressure to secure any agreement. France had previously threatened to veto any deal it considered “rushed” through at the last minute. The Johnson government responded, “We have been clear that the future relationship needs to be concluded by the end of the year, and negotiation won’t continue into next year.”

In attempting to avoid a “no deal”, both the UK and the EU are balancing their predatory interests against volatile domestic and international situations. The UK is already among the major economies worst hit by the pandemic, with the OECD predicting a 6 percent contraction by the end of 2021. Forecasts for the effect of a “no deal” Brexit are universally dire. A confidential Cabinet Office briefing leaked late last month warned of a “systemic economic shock” and consequent “industrial action” and increasing “community tensions”. This would impact a population already seething at the government’s homicidal “herd immunity” response to the pandemic.

The economic impact on the EU would be felt by those European economies mostly closely tied to British markets, and a “no deal” would threaten military cooperation which Germany is particularly anxious to strengthen. A “no deal” Brexit would deal a political blow to the union at a time when it is already facing a mounting threat of break-up due to rising national tensions between the core countries, Italy, Spain, and the Eastern European states, Poland and Hungary in particular. The two member states are blocking a multi-billion-euro EU budget in protest against attached requirements that governments who receive funding must abide by the “rule of law”.

Hungary and Poland’s blatant authoritarianism is considered an embarrassment to the EU, which threatens to expose its rotten claim to being the world’s beacon of democracy. But France and Germany are hardly going to force the issue, since their own governments are giving succour to the far-right, whipping up Islamophobia, handing carte blanche to brutal police and state security services, and criminalising Muslim and left-wing organisations, including the Sozialistische Gleichheitspartei (Socialist Equality Party) in Germany.

Both the UK and the EU are hanging on the course of events in the US following the November presidential elections. The victory of Democrat Joe Biden, whose hostility to Brexit is well-known, was a boon to the EU, whose leading powers now hope to form an equal partnership with American imperialism based on an opposition to China. The Tory government’s Brexit strategy had leant heavily on a slavish adherence to Donald Trump’s “America First” agenda and its hostility to the EU. Johnson must either reach an accommodation acceptable to the incoming Democrat administration, or hope for the success of Trump’s ongoing efforts to overturn the election result with the backing of the Republican Party.

Writing against “social patriotism” and nationalism in “War and the Fourth International” in 1934, Leon Trotsky explained that the task of socialists, and ultimately the working class, was “to follow not the war map but the map of the class struggle”. The same can be said of the Brexit negotiations. All possible outcomes—the success of failure of one imperialist power over another—will mean a redoubled assault on the European working class and an escalation of global militarism.

The task for workers in Britain and Europe is to organise their own response to this threat, based on a socialist and internationalist programme and the fight for a United Socialist States of Europe. This is the perspective advanced by the European sections and sympathizing groups of the International Committee of the Fourth International (ICFI): the Socialist Equality Party, Parti de l’égalité socialiste, Sozialistische Gleichheitspartei and Sosyalist Eşitlik.