Britain and EU make slow progress toward Brexit

Brussels wants three issues resolved before moving forward: how debts will be paid off, guaranteeing the rights of expatriates, and settling the EU-UK land border in Ireland.

First Look

The European Union has not yet reached a confirmed deal with Britain over the "Brexit bill," EU diplomats and officials said on Tuesday, adding that some in Brussels were worried that progress on a cash settlement masked differences over other issues.

"We are not there yet," EU Brexit negotiator Michel Barnier told Reuters in Berlin when asked about British newspaper reports that his team had broadly accepted an offer that the reports put in the order of €50 billion ($60 billion).

Britain wants to start negotiations on the trade terms that will be put in place once it leaves the EU in 2019, but Brussels has demanded it first resolve three issues: settling its bill, guaranteeing the rights of expatriates, and explaining how the EU-UK land border will operate in Ireland.

Work was continuing on all three issues, Barnier said and he hoped to be able to tell EU leaders at a summit in two weeks that "sufficient progress" had been made that they could launch negotiations on a future trade pact.

British Prime Minister Theresa May has been given an "absolute deadline" of Monday, when she will meet Mr. Barnier and European Commission President Jean-Claude Juncker in Brussels, to deliver improved offers in all three areas so that EU leaders can give their approval at the Dec. 14-15 summit.

Several EU diplomats told Reuters Britain had finally given a verbal commitment in recent days to pay a share of EU budget spending after it leaves, which would cover much of what the Union has been demanding. But they stressed that this was short of a confirmed agreement.

"Deal or settlement are not the words I would use," said one envoy, warning that a collapse in talks was still possible.

"The UK is moving," said another. "We finally, in the 11th hour, seem to have some traction and positive exchanges in the financial talks. But we're still going through the financial issues line by line to explore potential movement and space."

Foreign Secretary Boris Johnson, a leading Brexit campaigner who earlier this year said London would pay nothing like the 60 billion euros the EU estimated it needed, told Reuters during an EU-Africa summit in Ivory Coast that he hoped Britain's offer would "get the ship off the rocks" and launch trade talks.

But some EU governments are concerned that London may push back harder on the other two issues. Brussels wants the EU court to have some sway over the rights in Britain of EU residents who stay on after Brexit, and wants to hear how London plans to avoid a hard customs border with EU member Ireland that could disrupt the peace in Northern Ireland.

"Where we now seem to be moving ahead on money, other issues are proving more difficult than previously," a third EU diplomat said, naming issues of "sovereignty" over citizens' rights and the border as now seeming harder to crack than a month ago.

There was concern, he added, that Britain was "trying to sideline Irish concerns by moving on the money," saying a split on this could still scupper any deal on trade talks next month.

British and EU sources played down reports that negotiators had discussed hard numbers on the settlement. Both sides have always said that a final figure will depend on future variables and that their initial interest was agreeing a "methodology."

However, EU diplomats said that Ms. May's previous commitment to maintain contributions during a two-year transition period after Brexit – worth some €20 billion or more – added to new offers to pay future sums committed to during the 46 years of UK membership could cover much of the €60 billion they wanted.

Sources in the British government, which wants any offer on its part to unlock a simultaneous pledge from Brussels of opening trade talks in the new year, said it had not offered up any numbers to the EU, only commitments that will be covered.

Criticism among hardline Brexit supporters of such payments has been somewhat more muted in recent weeks and British media reported that May had won backing from her cabinet to pay more.

"It's an eyewatering sum if it's 55 billion," said Andrew Bridgen, a lawmaker from May's Conservative party who, unlike the prime minister, campaigned for Brexit in last year's vote. "But as we know nothing is agreed until everything is agreed.

"It depends on what we get for it in terms of a trade deal."

EU officials say Brussels is willing to work with May to massage the figures – which in the end depend on future developments – in order to help her win support at home. 

This story was reported by Reuters.