BREXIT DEADLOCK

A60 billion euro gulf between the European Union and Britain over how much London owes when it quits the bloc may be the biggest obstacle to a deal on an orderly Brexit in March 2019, officials said after talks this week. There are sharply differing legal interpretations of the “Brexit bill” that Britain will legally be obliged to pay in a divorce settlement with Brussels. But there are signs too of where compromise may emerge that could allow Prime Minister Theresa May deliver a headline figure more palatable to British voters than the 60 billion euros ($70 billion) widely talked about and without leaving the other 27 leaders staring at a hole in budgets.

The key could be to take account of payments Britain is willing to make after leaving as part of a transition to a new cooperation pact with the bloc, EU officials and diplomats involved in negotiations said last Friday after tense talks in Brussels. Brexit Secretary David Davis, asked about that on Friday, said: “It’s an idea that’s been floated around.”

A snag though is that EU chief negotiator Michel Barnier is bound by his 27 national masters not even to discuss any post-Brexit arrangements until “significant progress” is made on agreeing a divorce.

However, Barnier has made clear he does not need to agree any figure before asking EU leaders to launch parallel talks on the future EU-UK relationship — possibly at a summit with May in October.

He would be content with agreeing the “methodology” of calculation before launching Phase Two.

Barnier made clear he disliked the first formal British response on Tuesday to the EU’s demands for probably several years-worth of its current annual EU contributions to cover outstanding commitments to such things as EU staff pensions and future EU grants already promised to developing countries.

The confidential legal analysis, which British officials said rejected EU assertions that the bloc’s seven-year financing plans are legally binding on member states, meant London was refusing to pay for any commitments after Brexit, Barnier said — at odds with what May’s government has previously said.

However, EU officials’ ears pricked up when Davis told the same news conference that, even if Britain found no legal basis for many EU demands, it also recognised “moral obligations” and was prepared to pay for good relations in the future.

“We’ve a very different legal stance,” Davis said.