Despite emergency talks between the two sides, the UK Government has rejected EU demands to scrap the legislation that Brussels deems a “clear breach”.
Adler said that the EU was still negotiating on trade with Britain, because Brussels knows it can use this deal to punish the UK down the line.
She explained: “Both sides say they want a deal, that it is in their interests to have a deal.
“The EU has said, we will go ahead and try to get a deal, we managed last-minute concessions last time around with the withdrawal agreement.”
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The BBC journalist added: “Those concessions can always be dressed up as victories – we have seen that before.
“The EU suggests it is difficult, that time is running out, but it is not inconceivable.”
However, Adler warned that the EU has also outlined a series of threats and punishments that they can wield if Boris Johnson defies Brussels.
She explained: “Along with its threat of legal action over the Internal Market Bill, the EU is saying that in the withdrawal agreement, there is an arbitration dispute mechanism that they trigger if they need to.
Adler added: “They could take away any extra agreement, such as financial services, which is so important to the UK.
“Financial services may trade in the EU single market, and the EU can take away those permissions or Brexit licenses at any moment.
“That is what the EU is threatening and why they are still pursuing the trade negotiations.”
Adler later tweeted that Brussels is also having to talk tough on Britain’s breach of the withdrawal agreement in order “to send a clear message to EU members that break/threaten/dance around EU regulations and the rule of law .. eg Hungary, Poland.”
She added that the EU was hoping that the “brewing rebellion amongst some Tory MPs plus opposition in House ofLords will kill the Internal Market Bill in current form”.