Theresa May is preparing to go over the heads of Jean-Claude Juncker and Michel Barnier and appeal to Europe’s leaders to approve the start of trade talks with the EU this autumn.
With negotiations at an impasse over Britain’s refusal to sign up to a method of calculating the so-called divorce bill Mrs May intends to use October’s European summit to make her case directly for moving the talks on.
The prime minister may also approach other leaders individually before the summit.
Mr Juncker, president of the European Commission, has said it is “crystal clear” that an “enormous amount” of issues need to be settled before talks on a future trade deal or transition arrangements can begin. Under the negotiating mandate for the Brexit talks set down by the EU, “sufficient progress” must be made on the divorce bill, Northern Ireland and citizens’ rights before discussions can move on to future relations.
Britain is arguing that it is impossible to make sufficient progress on these issues without simultaneously negotiating the future relationship.
Mrs May will emphasise that Britain is prepared to make a significant financial payment to EU coffers but only as part of wider package that would allow significant access to the single market and a customs agreement during a transitional period.
Privately, some ministers believe that the commission is repeating the tactics it used during the Greek bailout — by taking responsibility for the negotiations but refusing to compromise on the ground that it has to follow the mandate laid down by EU leaders. They argue that Britain must stand firm and a government source added that there was considerable sympathy for the British position among a number of member states that would eventually force a compromise.
“Mr Juncker says it’s ‘crystal clear’ that we can’t talk about the future relationship before solving divorce issues, but this is a decision to be taken by the EU 27, not the commission,” they said. “Some heads of state say it’s ‘common sense’ to have a discussion about both.”
Official talks resume in Brussels today with British negotiators setting out their “legal analysis” of the commission’s financial demands. But they said they were not making any commitment to pay into the EU budget after Brexit.
The government’s difficulties have been underlined by an ICM poll for The Guardian yesterday which found three quarters of voters thought paying an “exit fee” of £30 billion or more to the EU would be unacceptable. Two thirds found £20 billion unacceptable.
Mr Juncker said that Britain seemed to be hesitating in “showing all its cards”. He added: “I did read, with the requisite attention, all the papers produced by Her Majesty’s government and none of those is actually satisfactory. So there is still an enormous amount of issues which remain to be settled.”
He said there had been “no definitive response” to concerns about the Northern Ireland border. But a British official said he did not understand what Mr Juncker meant. “He said we don’t have a clear position on Ireland when we’ve published one and they haven’t.”
Main sticking points
The British do not want to concede a financial payment too soon because they know the issue is their greatest negotiating strength and want it linked to a transition deal.
Britain’s position paper says in effect that Northern Ireland should have the same customs relationship with the EU as with the rest of the UK. Brussels fears this would offer a back door for smugglers.
The EU wants the rights of its citizens in Britain to be enforced by the European Court of Justice. The UK calls this “judicial imperialism”.
The two sides cannot agree on the circumstances in which a British or EU citizen could be expelled from their country of residence.
The EU wants its citizens living in Britain who marry somebody from outside Europe to be able to live with them without any restrictions. UK citizens cannot do this.
The EU wants Britons living in Europe to only have residency rights in that state, and not across the union. Britain says that would be discriminatory.
