Welcome to the Guardian's weekly Brexit briefing, a summary of developments as the UK heads towards the EU door marked "exit". If you'd like to receive it as a weekly early morning email, please sign up here. You can listen to our latest Brexit Means podcast, updated every Wednesday, here. And with the general election under way in the UK, you can also sign up to the Snap, our daily email election briefing, here.
Also: producing the Guardian's independent, in-depth journalism takes a lot of time and money. We do it because we believe our perspective matters – and it may well be your perspective too. If you value our Brexit coverage, become a Guardian Supporter and help make our future more secure. Thank you. The big picture The words are in the Conservative party election manifesto, and they prompted a thunderous round of applause from the studio audience when Theresa May uttered them during Monday night's TV grilling: "No deal is better than a bad deal." The Brexit secretary, David Davis, has made similar claims, arguing that the UK "must be prepared to walk away" from the upcoming Brexit talks – due to start on 19 June – if it feels it is not getting the kind of deal it wants. It's possible, of course, that this is just a negotiating tactic. But on the off-chance that the government actually believes it, it's worth looking at what a "no deal" Brexit might look like in practice. After 40 years of integration, Britain and the EU are intimately entwined in many areas and at many levels. Separation is not just about trade tariffs, although they would certainly hurt – 10% on car parts (many of which cross borders multiple times), for example, and up to 40% on dairy products. But Britain and the EU also have a common regulatory framework, and belong to a customs union. So "no deal" would mean exhaustive, possibly lengthy customs checks, because rules of origin determining the national origin of products would instantly come into force. As the Centre for European Reform argued last week, it would also mean UK pharmaceutical and chemical companies losing EU product approval across the continent; UK-based airlines seeing flights to EU member states grounded; and City financial firms losing their passporting rights. The economic consequence of this kind of train-crash, no-deal Brexit – potentially far more damaging than a negotiated transition even to trading on World Trade Organisation terms – could be a fall in GDP of as much as 5.5%. The CER says: British exports of goods and services would shrink very sharply ... provoking a sharp fall in the value of sterling. Inflation would rise as the weakening of sterling and the imposition of tariffs boosted the prices of goods, in turn eroding disposable incomes and consumption. The result would be a deep recession." So why would the prime minister continue to argue that "no deal is better for Britain than a bad deal"? Perhaps what she really means is that on the domestic political stage, it would be better for her. The view from Europe In an intervention seen by many as a historic turning point, the German chancellor Angela Merkel said that following the UK's Brexit vote and Donald Trump's election, the EU could no longer "completely rely" on on its UK and US allies: We have to know that we must fight for our future on our own, for our destiny as Europeans ... We Europeans truly have to take our fate into our own hands. Though her remarks were made largely for a domestic audience in an election campaign, they were also a conscious call for EU unity and purpose in a less certain world – and a reminder that Brexit talks will take place against that backdrop.
Merkel's remarks followed an eventful Trump visit to Brussels that left European leaders shaken by (among other things) his ignorance of the bloc's functioning, and a G7 summit in Sicily at which the US president refused to commit the US to the Paris accords on climate change. The European council president, Donald Tusk, at least managed to persuade Trump, who had said he believed more countries would leave the EU after Britain, that Brexit was an "incident not a trend" and had left the bloc more united, not less. And all the while, the EU continued to work – in considerable detail – on its Brexit negotiating positions, publishing two papers (on the exit bill and citizens' rights) that seem to leave the UK government precious little wiggle room. Meanwhile, back in Westminster
Campaigning in the general election halted for much of last week in the wake of the Manchester suicide bomb attack. Campaign diaries were scrubbed as the terrible news emerged, including a planned visit to Gibraltar on Tuesday by Lib Dem leader Tim Farron intended to highlight issues connected to Brexit. The pause in national campaigning lasted – with one exception – until Friday, although leafleting and other local efforts resumed beforehand. The exception was Ukip, who launched their manifesto on Thursday morning at an event suddenly centred heavily around the party's increasingly robust and populist thoughts on tackling Islamist terrorism. When Labour and the Conservatives resumed, much of the focus was also on security, the brief halt forgotten as they exchanged views over the response to terrorism. Amid all this, Theresa May's poll lead continued to shrink. Most pundits still agree she's on course for a healthy majority on 8 June, but it looks slightly less of a foregone conclusion than a week or so ago. You should also know: Read these In the Guardian, Nesrine Malik argues that the "global Britain" that Brexiters dream of is a myth animated by populist anti-immigration sentiment – it's about reaching out not to equals, but to economies it can plunder: At the heart of this lies the hubristic idea that Britain can just go back to doing things as it did before – dictating the terms of commerce, while keeping its business partners at arm's length. You know, like when they were colonies. Rafael Behr tackles both Merkel's warning that Britain can no longer be completely relied on and May's insistence that "no deal is better than a bad deal". The first may have been "overwrought" because of its domestic political context, he says, but must be taken seriously; the second is "nonsense": There is no such thing as 'no deal'. There is orderly transition or there is frantic patching up of essential arrangements as they expire ... If May is bluffing, it is only her domestic audience that can be fooled and they won't stay fooled for long. If she isn't bluffing, she is delusional. In private, EU politicians have urged British counterparts to level with voters and prepare them for compromise. Their fear is that UK pragmatism will be lost for good. Merkel has resorted to voicing that anxiety in public. When the world's most experienced democratic leader warns that [Britain] is starting to look unhinged, it is worth considering that she may be right. On politics.co.uk, Ian Dunt argues that if May conducts Brexit in the way she has conducted her election campaign, we're all in trouble: Theresa May's election campaign has been a collection of unforced errors. What's most concerning is that this is how she performed against Jeremy Corbyn. The entire reason this election is taking place right now is because he is such a weak candidate. How will she do when she is facing a much larger, more powerful, better-prepared opponent? On the evidence of what we've seen so far, there is ample reason for concern. Tweet of the week David Schneider on the TV non-debate (and the audience's reactions): | 
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Theresa May during her appearance on May v Corbyn Live. Photograph: Stefan Rousseau/AP 
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