British negotiators rejected the EU’s demand that they come up with a specific proposal on the bill London would have to pay as part of its exit from the bloc. The UK is questioning its obligations in regards to every line in the EU’s trillion euro multiannual budget, sources familiar with the talks explained.
The second round of the Brexit talks held in Brussels will end tomorrow with progress made on all fronts, according to officials.
Both sides intend to issue a statement on Thursday (20 July) to underline the achievements following four days of talks.
As previously signalled, the EU and UK negotiators shared a common understanding on the political objectives to be reached in regards to the border in Northern Ireland and the rights of their citizens living in each other’s territories.
But no progress was made on the most controversial issues: the financial settlement the British government must honour before leaving the EU in March 2019 and the European Court of Justice’s role in settling disputes after this date.
The Brexit bill is arguably the most explosive issue for weakened British Prime Minister Theresa May.
On Monday, the British government for the first time admitted its financial obligations to the EU budget. During the second round of talks, officials said there was an understanding that London would make a net payment to Brussels.
But UK negotiators requested legal arguments from the EU side to back the Union’s demands on every budget line of the multiannual financial framework 2014-2020, the EU’s long-term budget.
Britain underlined that each budget envelope and programme is a single and different legal act.
This approach could further delay a negotiation process which already started on the wrong foot this week.
“The clock is ticking,” said the EU chief negotiator Michel Barnier.
He insisted that the bloc would not agree to start discussing the future relationship, as the UK wants, until the outstanding payments have been settled.
The EU become impatient with the UK’s lack of a detailed proposal to at least agree on a common methodology to calculate the final sum.
Despite the EU’s demands to put forward a concrete document in this regard, the British government is not expected to come up with anything during this first phase of the talks.
London is particularly opposed to paying farm subsidies for 2019 and 2020 after it leaves the EU.
The EU argued that London must pay all its commitments made under the current MFF. On top of that, it must cover its contributions and guarantees to various EU funds and the European Investment Bank. The figure could be between €60bn and €100bn .
While Brussels does not want to detail how big the bill would be, EU Budget Commissioner Günther Oettinger told EURACTIV in March that the €60bn estimate was “not totally wrong”.
What does ‘sufficient progress’ mean?
Both sides aim to make “sufficient progress” by October in order to begin the second phase of the negotiations on the future agreement.
The EU and the UK are not yet aligned on what this sufficient progress means. For the UK, it means agreeing on the methodology to calculate the final exit bill. The exact figure would come only at the very end of the process.
But Barnier said he would not move to the second phase until Britain has committed to pay the full bill.
Officials familiar with the talks said that the spirit was very different on the issue of Northern Ireland. Both sides shared the same “destination”.
Negotiators are working out practical issues, especially those related to the creation of a common travel area and the cooperation with Ireland on twelve areas included in the Good Friday Agreement.
Both sides also agreed that there will have to be a high degree of visa cooperation. But by October they are not expected to find specific solutions to technical issues regarding the implementation of the ‘soft border’ that both sides desire for Northern Ireland.
Closer on rights
In regards to citizens’ rights, some sources have pointed out that the EU and UK are closer on many issues than it initially appeared, after comparing the EU’s demands and the UK proposal on this chapter.
According to one official, both sides are speaking about the same things, but in some cases just with different language. All they need to do is close the generosity gap between their offers, the official added..
Talks on the role of the ECJ are stalled, as the EU does not want to compromise on giving any oversight of its rulebook to a third party, and London is playing its cards close to its chest.
This issue is expected to drag on during the negotiations, not only during the divorce talks but also during the discussion on the future relationship.
Despite the lack of results, some officials noted the progress made and welcomed the fact that the talks took place in a professional and well-prepared manner.
A total of 98 people represented the UK government, while the EU’s Brexit task force is made of 45 people, supported by some other EU officials for specific dossiers.
Following the good-humored opening of the negotiations last month, this second round explored positions, found areas of common understanding and detected points of disagreement, the sources explained.