The European Union's chief Brexit negotiator raised the prospect that the United Kingdom could crash out of the bloc next year without the transition period that is the number one priority for business.
The UK's decision to leave the European Union will mean border checks at the Irish frontier are "unavoidable", Michel Barnier has said today.
"To be quite frank, if these disagreements persist, the transition is not a given", he told reporters.
"The sooner the United Kingdom makes its choices, the better", Barnier also said.
During this period, Britain will still follow European Union laws in exchange for access to the single market, but lose all decision-making power.
Barnier said it was "important to tell the truth" that border checks between Northern Ireland and Ireland would be "unavoidable" if it left the single market and the customs union.
The transition is meant to cover a period of around two years after Britain leaves the bloc, in order to give United Kingdom businesses longer to prepare for the historic split after 45 years of membership.
Davis said the EU's approach was "discourteous", to which Barnier responded on Friday by saying: "I don't really understand why this reaction, this uproar, we do not wish to punish whatsoever".
Mr Davis made the comments after two days of talks amongst Theresa Mays Brexit ministers which were aimed at reaching agreement on a future relationship with the EU.
Mr Barnier, speaking after a week of technical discussions between civil servants on both sides, said that three "substantial" disagreements remained over the transition period.
The document suggested Britain's access to the single market could be restricted if Britain failed to live up to its promises in negotiations.
"That's not what the aim of this exercise is, it's not in good faith, and we think it was unwise to publish that".
He said he had "not been in the least discourteous or vindictive" adding: "It's totally foreign to my state of mind".
The EU's Chief Negotiator, Michel Barnier, will give a news conference later this morning outlining developments in the negotiations.
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