Britain and the EU are stuck in a “disturbing” deadlock over the Brexit divorce bill, although a breakthrough remains possible in the next two months, European Chief Negotiator for the UK Exiting the EU Michel Barnier said on Thursday.
In a gesture to London, EU leaders at a summit next week are to order the launch of preparatory work on a future trade deal, even though they will not approve moving on to full trade talks until December.
However, the stalemate will stoke fears swirling in London and Brussels of a breakdown in talks that could see Britain leaving the EU in March 2019 without an agreement to soften the blow.
After a fifth round of talks with British Secretary of State for Exiting the EU David Davis, Barnier said he “cannot recommend” to EU leaders at the summit on Thursday and Friday next week that negotiations move on from divorce issues to talks on a post-Brexit relationship.
The Frenchman reserved his most cutting comments for the issue of financial commitments, saying that Britain had still not spelled out what British Prime Minister Theresa May promised in a key speech in Florence, Italy, last month.
“We are at a deadlock on this question, which is extremely disturbing,” Barnier said at a news conference with Davis at the European Commission headquarters in Brussels, but added: “I remain convinced that with political will, decisive breakthroughs are within reach in the coming two months.”
The leaders of the 27 other EU countries have demanded that there be “sufficient progress” on the Brexit bill, the rights of EU citizens living in Britain and on Northern Ireland before moving on to discuss a post-Brexit trade deal.
Germany has led opposition to having even informal talks on trade or on a two-year trade transition period suggested by May, saying that the divorce must be sorted out first.
The tough line taken by Europe on Brexit was restated by French Minister of the Economy and Finance Bruno Le Maire, who on Thursday said in Washington that the “British people and British government have to assume the consequences of their decision” to leave.
However, May later said the two sides were “very close to agreement” on a number of issues, including citizens’ rights, and welcomed Barnier’s recognition that progress could be made in the coming weeks.
British Secretary of State for Foreign and Commonwealth Affairs Boris Johnson told the EU to step up the pace.
“We’re looking for some urgency from our friends and partners, and it’s time to put a bit of a tiger in the tank and get this thing done,” he said.
Davis, a key figure in the “Leave” campaign in last year’s Brexit referendum, said he still hoped EU leaders could decide to shift to the next phase when they meet next week.
If that was not possible, he called on the EU to give Barnier a mandate next week to “explore ways forward,” even if the next phase is not formally opened.
In response, a draft summit statement by the EU leaders said they would reassess progress in December, and if the verdict is positive they would issue guidelines for trade talks plus a transition.
However, the concession comes amid growing concerns that Britain could leave without a deal, which could cause huge economic disruption on both sides of the English Channel.
Barnier warned that “a ‘no deal’ will be a very bad deal” after May admitted this week that her government was setting aside money for a so-called hard Brexit.
European Council President Donald Tusk on Tuesday warned that the bloc might rethink whether a Brexit deal is possible if there is no progress by December.
“If it turns out that the talks continue at a slow pace, and that ‘sufficient progress’ hasn’t been reached, then — together with our UK friends — we will have to think about where we are heading,” he said.
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