Deal on British divorce bill vital for future talks on EU ties

The European Union stepped up pressure on Britain on Friday to clarify over the next two weeks what financial obligations to the EU it will honour on leaving the bloc in 2019, or risk delaying talks on future trade ties vital for firms in Britain.

The EU’s chief Brexit negotiator Michel Barnier said after talks with his British counterpart David Davis that the EU needed more clarity on top of a declaration on the financial settlement made by Prime Minister Theresa May in September.

Without more clarity on the divorce bill, EU leaders meeting on Dec. 14-15 will not be able to agree that sufficient progress has been achieved in the negotiations to move on to the next phase of discussing future trade relations with Britain.

“It is absolutely vital if we are to achieve sufficient progress in December,” Barnier told a joint news conference, adding not all details had to be settled now, but there needed to be “sincere and real progress”.

The clarifications should come within the next two weeks, Barnier said, in time for the last negotiating round in the week starting on Dec. 4th.

“If that’s not the case, then we will continue and that will pull back the opening of discussions on the future,” he said.

He stressed progress had to be made on all three key issues of the divorce talks – the money, the rights of EU citizens in Britain and British citizens in the EU, and how to avoid erecting a physical border between Northern Ireland and Ireland.

Davis said both sides made substantial technical progress on all the issues that need to be addressed and said political decisions were needed to move ahead.

“This is now about moving into the political discussions that would enable both of us to move forward,” he said.

The EU believes Britain will owe it around 60 billion euros when it leaves at midnight on March 29th, 2019, but Britain has been reluctant to come up with any numbers.

STRONG PRESSURE

Davis repeated the declaration made by May in September in the Italian city of Florence that EU countries will not need to pay more or receive less for the reminder of the current EU long-term budget as a result of our Britain’s exit.

“The UK will honour the commitments we made during the period of our membership,” Davis said.

Britain is under strong pressure from business to clarify what terms of trade with the EU they will have after Brexit.

Some financial institutions have started moving operations to the continent to retain full access to the EU’s single market of some 450 million consumers and British-based car-makers and pharmaceutical companies are deciding now.

Barnier said both sides were moving ahead on citizens’ rights and that Britain provided “useful” clarifications on a process through which EU citizens could obtain a “settled status” in Britain, but the EU still needed reassurances on how such a system would work.

He said issues related to family reunification, the right to export social security benefits and the role of the European Court of justice still need work.

He stressed that on Northern Ireland both sides should find technical and regulatory solutions to prevent a hard border while keeping the EU single market intact.

But Davis said while Britain did not want a hard border separating Northern Ireland from EU member state Ireland either, the deal could not mean building a border inside the United Kingdom by somehow keeping Northern Ireland in the EU’s structures.

“We respect the European Union desire to protect the legal order, the single market and the customs union. But that cannot come at the cost of the constitutional and economic integrity of the United Kingdom,” Davis said.

“We recognise the need for specific solutions for the unique circumstances of Northern Ireland. But let me be clear, it cannot amount to creating a new border inside the United Kingdom,” Davis said.