The European Union threw down the Brexit gauntlet to Theresa May on Saturday, issuing an uncompromising list of Brexit demands at a special EU Leaders’ summit amid signs of rising tensions between London and Brussels.
The leaders of the EU’s remaining 27 states – usually bitterly divided – staged a massive show of unity in Brussels aimed at intimidating British Brexit negotiators into accepting its key demands on a financial settlement and the rights of three million EU citizens living in the UK.
Donald Tusk, the European Council president, trumpeted what he called the “outstanding unity” of the 27 after they unanimously agreed the negotiating guidelines in just four minutes.
In a combative performance, he repeated his warnings that the UK must agree a ‘divorce settlement’ before entering trade talks, adding that it was “pure illusion” for Britain to think that trying to divide the member states would be to the UK’s benefit.
Following a Downing Street dinner last Wednesday between Mrs May and Jean-Claude Juncker, Europe is demanding that EU citizens in Britain should have their existing rights protected in the Article 50 agreement, and that they should be protected by the European Court of Justice.
“The Commission has prepared a full list of rights and benefits that we want to guarantee for those affected by Brexit,” Mr Tusk said.
“In order to achieve sufficient progress we need a serious British response.”
The implication, EU sources confirmed, is that the – in the opinion of the European Union – the UK is still not giving “serious” responses to European demands for a financial settlement and a deal on citizens’ rights to be hammered out before talks on a trade deal even begin.
Jean-Claude Juncker, the president of the European Commission, added his warnings about a “difficult” negotiation ahead.
He spelled out that Europe wants a detailed and legally water-tight deal guarantee EU citizens in the UK after Brexit, and would not settle for blanket political assurances from the UK side.
“This does not simply imply setting out a few principles,” he said.
“The negotiations will be difficult and it will be even be difficult to retain the unity we were able to construct today and we will do our utmost to retain that unity, which is important for the 27, but it is also important for the United Kingdom [to conclude a deal],” he added.
Mr Juncker also hinted at his frustrations with Mrs May at last week’s dinner after being chided by Mr Tusk for being too pessimistic about the prospects for a deal, urging his colleague to “be more optimistic”.
“That’s what Mrs May told me last Wednesday,” Mr Juncker shot back, “Every time I was asking questions, she said ‘be patient and be ambitious’. The same remarks have to be addressed back to the United Kingdom.”
Mr Juncker warned that Britain appeared to be under-prepared for the task ahead, echoing warnings from multiple EU officials that the David Davis's team would be heavily out-gunned by Mr Barnier's "Task Force 50".
"I have the impression sometimes that our British friends, not all of them, do underestimate the technical difficulties we have to face. A single and not simple question of citizens' rights is in fact a cortege of 25 different questions which have to be solved," he said.
"So this will take time and if we want to be precise and to deliver guarantees to citizens, this will take a huge amount of time, although as a Commission and as Michel Barnier, we have already prepared a text which could be adopted immediately if our British friends would be ready to sign it like that, that will probably not happen."
EU leaders are also understood to have discussed a ‘no deal’ scenario and were addressed on possible outcomes by Michel Barnier, the EU’s chief Brexit negotiator, who has been charged with implementing the EU’s negotiating ‘red lines’.
“We are ready,” declared Mr Barnier as he entered the talks, echoing a mantra from the EU side that they are fully prepared, in implied contrast to the British team which has still not made its negotiating positions clear.
EU diplomats said the diplomatic show of force was designed to impress on Britain that the EU will not budge on its refusal to negotiation a future trade deal with Britain until the UK has settled its so-called Brexit bill and guaranteed EU citizens a host of rights after Brexit.
The firm-but-fair mantra was repeated by EU leaders throughout the day, but only barely concealed the strains now appearing between London and Brussels as Theresa May sticks to what EU officials insist are “unrealistic” expectations.
Those tensions spilled into the open this week when Angela Merkel, the German chancellor, warned that Britain suffered from dangerous “illusions” about its negotiating leverage, a remark that caused Mrs May to warn that EU nations were "lining up" to oppose Britain and that talks would be "tough".
The Downing Street dinner apparently did nothing to reduce tensions ahead of the talks, leading EU officials to warn of a “gulf of expectations” between the sides.
“What irritates the EU side is that the British are treating this as if it is a negotiation of equals, as if the interests of one departing state are equivalent to the interests of 27 – the reality is that Article 50 does not work like that,” said a senior EU official.
British officials close to the negotiations have down-played the gulf between the two sides, dismissing the EU’s demands as posturing that will soon simmer down once substantive talks begin.
“To be honest no-one is paying too much attention to these ‘guidelines’ – I’ve had them in my inbox for two days and not bothered to read them,” said one senior British official.
“They will soon be overtaken by the nitty-gritty of the negotiation.”
Senior EU officials, while noting that Britain has dropped talk of “a bad deal is worse than no deal” has warned that the cavalier British attitude is increasing the risk of a no-deal scenario.
The EU’s demands on the UK have strengthened since Mr Tusk first issued his draft negotiating guidelines on March 31, with member states adding requests on financial liabilities and citizens’ rights.
Among the hardest demands for Mrs May is an expansive €60bn Brexit bill to cover EU spending up until 2020 when the current budget runs out and a full list of rights for EU citizens living in the UK, to be arbitrated by the European Court of Justice – both of which cross Mrs May’s own red lines.
If the EU demands were agreed to in full, officials concede it would create a situation where EU nationals in the UK have more rights – say on appealing immigration decision against third country spouses – than are enjoyed by British citizens.
Only when Britain is deemed to have made “sufficient progress” on these key areas, however, will the EU side agree to unlock the door to a future trade deal, although the EU side has refused to specify what “sufficient progress” means, saying it will be a “political calculation” for EU leaders.
While the European made great play of its unity yesterday, minutes of internal EU meetings seen by the Telegraph suggest there is division over how far the EU should push its demands before agree to trade talks.
Nations that stand to lose from a weak UK-EU trade deal, such as the Dutch and the Danes have taken a softer line, while others – like Germany, France and Poland – have argued for the first part of the deal to be more firmly tied down before progressing to talks.