EU’s trade threat over divorce bill
Agree to pay or we’ll delay crucial talks, they warn
BRUSSELS yesterday threatened to delay critical Brexit talks unless the UK proves it is willing to pay a controversial divorce bill.
The bloc’s chief negotiator Michel Barnier delivered a ‘pessimistic’ address to EU member states in which he criticised the UK’s approach in early talks.
British officials involved in the discussions have reluctantly accepted the EU’s demand to provide initial guarantees on the multi-billion payment before a future relationship can be mapped out.
But during the private meeting, Mr Barnier told ambassadors that there was no sign of a breakthrough over the size of the bill during tense talks last week.
The UK negotiators, led by Brexit Secretary David Davis, are understood to have questioned the legal basis for many of the EU’s demands.
Europe’s leaders are expected to make a decision in October as to whether the UK’s commitments to making the payment are ‘sufficient’ enough before giving the green light to trade talks.
But if an agreement is not reached in October it means there will be a delay until – at least – the next European Council summit in December.
A source said: ‘He said he was pessimistic that sufficient progress would be achieved any time soon and if it were to be achieved in October the UK position would need to change substantially.’
The diplomat said that initial clashes suggested ‘a lot of water will pass under Westminster Bridge’ before the next phase of discussions can be opened. Other insiders said there was widespread ‘disbelief’ that the UK negotiators remained coy about money during talks last weeks and that ‘confidence is fading’ among EU officials. However, the bloc’s ‘ rigid’ approach to negotiations has frustrated the UK’s negotiating team, who believe that serious guarantees over the size of the Brexit bill should not be made until the very end of talks.
British officials said that the Treasury has combed through every detail of the EU budget and that the bloc’s approach ‘was not to anything like our satisfaction’.
Insiders on both sides have acknowledged that the UK is likely to use the bill as a bargaining chip and will provide financial guarantees in return for concessions in other areas.
One EU source said member states were increasingly convinced that the UK ‘is playing a clever game’ but said the strategy is risky given the time constraints surrounding talks.
While Prime Minister Theresa May has accepted that the UK will make some payments, EU leaders are anxious for more detail over concerns about how to fill the budgetary black hole that will be caused by Brexit.
A spokesman for the Brexit department yesterday insisted that progress to trade talks would be made by October.
He said: ‘It is important that both sides demonstrate a dynamic and flexible approach to these negotiations.
‘On the financial settlement, we have been clear that we recognise the UK has obligations to the EU and that the EU also has obligations to the UK.’