EU may want progress on UK €60bn exit bill before trade talks

The EU's Brexit negotiators expect to spend until Christmas solely discussing Britain's divorce from the bloc, denying London any trade talks until progress is made on a €60 billion exit bill and the rights of expatriate citizens.

A narrow divorce-first approach favoured by Michel Barnier, the EU's chief negotiator, would represent a big setback for Britain's aim for a fast-track EU trade deal completed by the end of 2018.

A move to delay trade talks sets the stage for a high-stakes standoff once formal Brexit negotiations begin. David Davis, the UK's Brexit secretary, wants all elements of Brexit to be handled "in parallel", saying he has told Mr Barnier that his "sequential" plan for talks "does not seem practical".

In recent weeks Mr Barnier has outlined to the EU’s remaining 27 members his views on the timing and order of talks, which moves from basic terms for the disentanglement, to scoping future trade relations and finally to preparations for a transition.

No special deal possible to stop the return of Border controls

---

Brexit protest: Mock Border checkpoint causes traffic delays

---

Ireland to resist hard Border after Brexit, vows Taoiseach

---

Spotting gap in jobs market works out very well indeed for Ireland

---

“He thinks we will be discussing money and acquired rights [of expatriate citizens] until December,” said one senior euro zone official in contact with Mr Barnier. “No trade, nothing about the future, just the past.”

Diplomats

Five other national diplomats involved in Brexit talks confirmed Mr Barnier's rough year-end timetable. Many noted that Theresa May, Britain's prime minister, had so far avoided acknowledging the break-up challenges and outstanding budget liabilities.

“If we don’t get them down to earth early in the game then we never will,” said one EU diplomat involved in talks.

Another senior adviser to a northern European leader said: “At this stage only the Brits are saying they want it all solved in parallel.”

However, EU countries have different views on the details of exactly how talks are staggered. If, as expected, Britain invokes article 50 next month, it will be the most sensitive unresolved question facing EU leaders when they draw up “guidelines” for Mr Barnier.

A special summit is expected in early April. At one extreme some of the EU countries – including some French officials – want Britain to honour its financial commitments as a first step. Others are concerned a hardline money-first approach will fail unless the "sweetener" of trade discussions is offered to keep the UK engaged. Spain, for instance, opposes "strict procedural requirements" and has backed early discussions about the future relationship.

Exit bill

Britain is banking on more trade-minded EU leaders keeping Mr Barnier in check. Most EU countries, however, do back the idea of some conditionality which ties progress on trade talks to British co-operation on the divorce and Britain’s exit bill.

“You need some parallelism,” said one diplomat closely involved in Brexit preparations. “But the leaders won’t be fooled by vague promises [on the divorce]. In the end you need to tackle the bill.”

Mr Barnier’s plan would expect Britain to agree a basic methodology for the exit bill, while leaving the precise figure until the final Brexit package is agreed.

A deal on principles around money and citizen rights is hoped for by December, allowing the EU to give a green light to trade talks at a summit that month. It could move faster if Britain gave clear early assurances on money and rights so it could quickly move to trade talks. – (Copyright The Financial Times Limited 2017)