During a second sitting around the negotiating table, the EU and the UK stuck to their guns on the financial obligations London should pay and what court would guarantee EU citizen rights in a post-Brexit world.
Following a first encounter last month, the negotiating teams led by Michel Barnier, on the EU side, and David Davis, on the British side, concluded on Thrusday (20 July) a four-day round of talks to set the terms of Britain’s departure from the EU.
But the negotiations barely managed to spot areas of disagreement that have already been identified.
As expected, the financial settlement London must cover and the European Court of Justice’s role in ensuring citizen rights were the most controversial issues.
But both sides could not even start sketching out the bare bones of a compromise as Britain came to Brussels empty handed.
“The third round must be about clarification,” Barnier stressed. The next round will take place next month.
The former French Commissioner expressed last week his impatience with Britain’s lack of clarity, in particular on the outstanding payments they have to meet.
Barnier expected the British team to come to this round of talks with its arguments so that they could discuss what should be in and out to estimate the Brexit bill.
Instead, the British negotiators just questioned every single budget line included by the EU, and did not clarify when they will put forward a proposal on the methodology to come up with a figure.
As the British government did last week, Davis admitted that the country has financial obligations. But given that these obligations are mutual, he said that “a solution would require flexibility on both sides”.
Britain argues that the other 27 member states also owe it money thanks to its participation in different EU assets. But the outstanding bill is much bigger with the EU. The net flow to Brussels could be between €60 billion and €100 billion.
Asked about whether there is room for compromise, Barnier said “we are not there yet”, as he insisted that first we need a “global picture”, namely the UK’s commitment to fully honour its payments.
It is “indispensable” to have the UK position on this in order to make “sufficient progress”, Barnier insisted.
If no progress is made on this front, Barnier would not recommend that EU leaders in October start negotiations on the future relationship between the two sides, which is a priority for London.
Both sides agreed that no incremental progress would be made when it comes to the financial settlement. “It will require a global approach,” explained a senior EU source.
Barnier also stood his ground on the ECJ’s involvement in ensuring that the rights of EU citizens are respected after Brexit takes effect in March 2019.
He described his differences with Davis on this point as a “fundamental split”, as London does not want foreign judges to rule on its soil. But the Frenchman argued that there is “no other way to guarantee” the rights of EU citizens than the ECJ.
“We owe them this certainty,” Barnier said.
In regards to the border with Northern Ireland, another difficult issue discussed during this second round, Barnier told reporters that more progress is needed on how to protect cooperation with Ireland and to maintain the common travel area after Brexit.
On other outstanding issues, such as police cooperation, Euratom and pending cases at the ECJ after the UK withdrawal, Barnier pointed out that more clarification is needed there too.
But the British negotiators did not raise the issue of Gibraltar during the talks, despite the second round’s goal of flagging areas of disagreement.
London protested after the EU gave veto powers to Spain in regards to the future of the Rock after Brexit, as any agreement would be subject to discussions between London and Madrid.
But this time around, nobody “put into question” the EU’s position on Gibraltar, a senior EU source revealed.