Sufficient progress on the first phase of Brexit talks is looking near impossible by October, with EU and UK negotiators increasingly pessimistic they can close the gap between their positions.
The UK’s recent barrage of position papers - from goods on the market to Northern Ireland to dispute resolution (see EUROPE 11844, 11845, 11846) - has been well received by EU officials, but dig a little deeper and there is considerable concern over the content.
Two major problems are plaguing negotiators as they go into a third round of talks, which are likely to start late on Monday 28 August and run through to Thursday afternoon.
First is the fact that the UK has yet to clarify its position on the financial settlement (and UK sources say they will “absolutely not” be setting out what they believe their future budget obligations are during this round). Second is the growing concern among the remaining 27 countries that the UK is using its position papers - particularly a paper on Northern Ireland - as a “Trojan horse” to leapfrog the EU’s preferred sequencing and begin talks on a future trade deal.
“If you want to have a discussion on the future relationship you need to do so on a basis of trust,” said one senior EU official.
“We are concerned by the linkages created in the UK paper on Ireland between the preservation of the peace process - including the invisible border - and the future of the EU-UK trade relationship,” said another official. “And in that context, we say the peace process must not be a bargaining chip.”
There is some hope that progress can be made on citizens (particularly frontier workers, social security coordination and professional qualifications) and on other separation issues such as goods on the market and cooperation on ongoing civil and criminal cases.
But money threatens to derail talks as the UK disputes the EU’s legal arguments on the divorce bill. UK sources have called the EU’s approach calculating its future obligations “odd” and say the EU has “massively over-egged its demands” - for instance, the EU’s insistence on billing the UK for British teachers seconded to European schools still rankles in London. But while the UK maintains it will not set out an estimate of its future obligations during the August round of talks, foreign secretary Boris Johnson - who previously said the EU could "go whistle" if it expected the UK to pay a bill of €100 billion - admitted on Friday "that we have to meet our legal obligations".
Nevertheless, the UK's reluctance to reveal its thinking on how to calculate its exit bill leaves little time to make real progress. The EU insists on closing its three priority issues - citizens, money and Ireland - before moving on to talks on trade, while the UK says not every issue needs to be agreed by then. “If you leave big, sensitive political issues to the end of the negotiation, such as the financial settlement, you increase the risk of failure, rather than decrease it,” one senior EU official warned on Friday.
Many in Brussels and beyond are increasingly pessimistic that EU leaders will be able to sign off on the first phase of talks in October. “There is a significant worry that we are not going to make it for October,” said one diplomat, with another confirming that there will be “no sufficient progress” by that date.
The UK has also failed to win itself any friends ahead of the talks after it emerged the Home Office sent deportation letters to around 100 EU citizens, later calling it an “unfortunate error”.
“August is shaping up as the round for clarification,” said a senior EU official close to the talks. “We are determined to move this forward.” (Sarah Collins)