The president of the European Central Bank told European Union leaders today that companies have to increase their preparations for a possible no-deal Brexit, an EU source said.
Mario Draghi's comments came the day after EU leaders agreed at a summit in Brussels to give Britain a final chance to leave the bloc with a deal, extending the Brexit deadline by two weeks to April 12 from March 29.
"Authorities and central banks are prepared but the private sector has to step up preparations," Draghi told the European summit, the source said.
In the case of a no-deal Brexit, trade between Britain and the EU would face immediate trade barriers and restrictions on business.
Draghi said the negative consequences for the 19-country euro zone would be limited, but he acknowledged that some countries were more exposed than others, the source said.
France, Germany, Belgium and the Netherlands are among EU countries with large trade flows with Britain and they are likely to feel more the pain of a non-negotiated Brexit.
Draghi also told EU leaders that the euro zone economy was still facing "protracted weakness and prevasive uncertainty" but risks of a recession remain "quite low", the source said.