The Brexit negotiations could be in a stalemate for months unless the UK agrees to honour all its financial commitments, the EU’s chief negotiator has suggested at the end of the latest round of talks.
A “new dynamic” had been created by Theresa May’s speech in Florence last week, Michel Barnier said during a press conference with the Brexit secretary, David Davis.
Both parties agreed that progress had been made, especially on the issue of citizens’ rights, but it became clear from comments in Brussels and elsewhere that outstanding issues remained.
Barnier lamented that Davis was, in his own words, not yet ready to specify what past financial commitments would be met by the UK. The British government has so far only offered to ensure that no country loses out in the two years after the UK leaves in 2019, at an estimated cost to the Treasury of €20bn (£17.5bn).
“The UK explained also that it was not in a position yet to identify its commitments taken during membership,” Barnier said. “For the EU, the only way to reach sufficient progress is that all commitments taken at 28 [member states] are honoured at 28.”
Davis, who appeared alongside Barnier in Brussels, said “decisive steps forward” had been made, in particular on ensuring the rights of citizens. “This round was a vital one,” he said, as he called for pragmatism.
In a move that could inflame Conservative Eurosceptics days before the party’s conference, Davis acknowledged that European law would take “direct effect” when it came to protecting citizens’ rights. This means 3.5 million EU citizens living in the UK can appeal to British courts using European law enshrined in the withdrawal treaty, which will override British law.
The development marks a stark U-turn on the government’s previous claim that such measure were “inappropriate and unnecessary”.
But the two sides still disagree on the role of the European court of justice in securing citizens’ rights and, as Barnier put it, “this is a stumbling block for the EU”. A big gap remained on family reunification, he added.
EU leaders insist talks on Britain’s financial settlement, the rights of citizens, and the status of the Irish border must make sufficient progress before they can be broadened to encompass future relations between Britain and the bloc. The UK had hoped to get the go-ahead on talks about future relations when EU leaders meet next month.
Barnier said: “I think it’s positive that Theresa May’s speech made it possible to unblock the situation, to some extent, and give a new dynamic to the situation.
“But we are far from being at a stage – it will take weeks, or maybe even months – where we will be able to say: ‘Yes, OK, there has been sufficient progress on the principles of this orderly withdrawal.’”
Barnier and Davis were speaking after it emerged that the UK’s potential liability for EU debts had increased by roughly €3bn. The EU’s latest annual accounts, released on Thursday, showed a €239bn liability for the bloc, up from €220bn. On top of this was a €67.2bn liability for staff pensions, up from €63.8bn in 2015. Together they could add at least €3bn to the UK Brexit bill. Davis declined to reveal what May meant in Florence when she said the UK would “honour [the] commitments we made during the period of our membership”.
“We are not doing the negotiation standing here,” Davis said.
The Dutch foreign minister, Bert Koedners, accused the UK of daydreaming. “I don’t think I’m the only one worried about the lack of realism we see on the British side,” he said. “The clock is ticking. Big Ben may be still for renovation, but in Europe time ticks on.”
The government will continue a charm offensive of member states. May will meet Angela Merkel, the German chancellor, in Tallinn, Estonia, on Friday in the margins of an EU leaders’ summit, where she is expected to say Britain is unconditionally committed to the defence and security of Europe.
Citizens’ rights are the rights and protections offered to all EU citizens, including free movement and residence, equal treatment and a wide range of other rights under EU law regarding work, education, social security and health.
They are held by some 3.5 million citizens from other member states in the UK and about 1.2 million British nationals on the continent, and are a key part of the negotiations that are taking Britain out of Europe.
More from the Brexit phrasebook
However, on Thursday night the European parliament’s chief Brexit coordinator, Guy Verhofstadt, said that Britain’s exit from the EU was a “waste of time and energy” and insisted that quitting the bloc was a “very negative project”. The former prime minister of Belgium said the move had fuelled a resurgence in the popularity of the union on the continent.
In a potentially significant move for 1 million British citizens living in Europe, the British government called on the EU to guarantee onward movement rights. This means, for example, a British national living in Germany could move to any other EU country after Brexit. In return, the 3.5 million EU nationals living in the UK would have an indefinite right of return, if they ever moved to another country. The EU has yet to respond to the British offer.
In a joint statement, the UK’s Confederation of British Industry and Trades Union Congress urged both sides to take action to guarantee citizens’ rights after March 2019.
“After 15 months of human poker, the uncertainty facing 4 million European and UK citizens has become intolerable,” the CBI and TUC said. “It is a blight on the values of our nations … a clear guarantee of the right to remain for citizens in both the UK and EU27 is needed within weeks.”
Meanwhile, the European parliament is preparing to formally censure the British government for discriminating against EU nationals since the Brexit vote.
A resolution by the parliament, to be voted on next Tuesday, says there is clear evidence that EU nationals are being treated unfairly in the UK and that Britons in mainland Europe are also suffering.
“Recent administrative incidents have demonstrated that discrimination against citizens of the EU27 in the United Kingdom and UK citizens in the EU27 is already taking place and is having an impact on the daily lives of the citizens concerned, limiting the effective exercise of their rights,” the document says.
The resolution also attacks the British government’s handling of the Brexit negotiations and claims that for May to live up to her pledge that there will be no physical infrastructure at the Irish border after Brexit, the province of Northern Ireland will have to stay in the customs union.
The European parliament will have the right to veto any agreement between the EU and the UK. Barnier meets its Brexit steering committee almost weekly.
Strong language is used in the nine-page resolution about Britain’s positions, including what it describes as a failure to provide concrete proposals on the financial settlement. The draft resolution says that “so far the absence of any clear proposals has seriously impeded the negotiations”.
The resolution further “notes” May’s request in her Florence speech for a transition period after March 2019, but it goes on to directly contradict comments from Davis over the weekend by insisting that the UK will remain under EU law and the European court of justice during that period.
“Such a transition can only happen on the basis of the existing European Union regulatory, budgetary, supervisory, judiciary, enforcement instruments and structures” and “can only be envisaged under the full jurisdiction of the court of justice of the European Union,” the resolution says.
