EU issues Brexit legal warning to Britain

Secretary of State for Exiting the European Union David Davis (Reuters/Francois Lenoir)
Secretary of State for Exiting the European Union David Davis (Reuters/Francois Lenoir)

Like any messy divorce, it looks like Brexit is going to be about how much money is at stake.

That is the inescapable conclusion from the latest round of “talks” between EU and British negotiators – from which Michel Barnier stated afterwards “no decisive progress was made”.

Speaking in a tense press conference alongside David Davis, the European Commission chief Brexit negotiator struck a pessimistic tone, saying the two sides are still “quite far” away from being in a position to begin discussions on future trade arrangements.

Mr Barnier also stated that Britain didn’t understand the single market, and that its desired position was “impossible”.

Mr Davis, in contrast, insisted there had been “some concrete progress”.

European Union's chief Brexit negotiator Michel Barnier (Reuters/Francois Lenoir)
European Union’s chief Brexit negotiator Michel Barnier (Reuters/Francois Lenoir)

Brexit divorce bill

The main point of tension appears to be how much Britain should pay the EU to cover its legal obligations.

In 2013, Brussels agreed a seven-year Budget that was signed by David Cameron. The EU says Britain must abide by those commitments – the UK now says it should only have to pay until it quits the EU in March 2019.

What does the EU say?

But today, Mr Barnier said it was clear the UK does not feel “legally obliged” to honour its “obligations” after its departure.

He said that it would “not be fair” for EU taxpayers from the remaining 27 states to pay for the obligations undertaken when Britain was a member.

“In July the UK recognised that it has obligations beyond the Brexit date but this week the UK explained that these obligations will be limited to the last payment to the EU project before departure,” he said.

He added: “Time is flying, it is passing very quickly, if we need to, we on our side, on behalf of the 27, are prepared on behalf of the EU institutions to step up and intensify the rhythm of the negotiations.”

What does Britain say?

Brexit Secretary David Davis says Britain has a very different interpretation of their financial obligations.

He said in the press conference: “The Commission has set out its position and we have a duty to our taxpayers to interrogate it rigorously.

“At this round we presented our legal analysis, on on-budget issues, on off-budget issues, and on the EIB – European Investment Bank.

“It’s fair to say across the piece we have a very different legal stance, but as we said in the Article 50 letter the settlement should be in accordance with law and in the spirit of the UK’s continuing partnership with the EU.”

What’s at stake?

Well, it’s not just pride. Although Theresa May’s Brexit team has insisted they will refuse to pay the sums demanded by the EU – thought to be around €75bn – the biggest problem is that the EU is refusing to conduct trade discussions until the issue of the divorce bill is settled.

Mr Davis is calling on Mr Barnier to “flexibility” in their approach.

He said today that progress had been made on issues including Northern Ireland, the approach to post-exit privileges and immunities and confidentiality requirements for information after Brexit – but hit out at the rigid approach to the talks being taken by Brussels.

He said: “Our discussions this week have exposed yet again that the UK’s approach is substantially more flexible and pragmatic than that of the EU, as it avoids unnecessary disruption for businesses and consumers.”

In a message to Mr Barnier and his team, Mr Davis added: “We can only resolve some of these issues with an eye on how the new partnership between us will work in future.

“This is not about skipping ahead or trying to reopen previous discussions, it is about pragmatically driving the process we all want to see.”

The EU chief is not budging though. And today Mr Barnier denied being angry about the way the talks were progressing, insisting he had shown the “typical calm of a mountaineer”, but said he was “impatient and determined”.

What about the single market?

In the latest sign of the EU’s frustrations with what they perceive as the UK’s “cake and eat it” approach, Mr Barnier said the position papers produced by Mr Davis’s department appeared to want to retain the benefits of single market membership.

Mr Barnier said the single market would not be “undermined by Brexit”, as he warned that it was “simply impossible” to shape its legal order from outside.

“The European Council guidelines state that the Union will preserve its autonomy of decision-making,” Mr Barnier told the conference.

“The UK wants to take back control, wants to adopt its own standards and regulations – but it also wants to have these standards recognised automatically in the EU.

“That is what UK papers ask for. This is simply impossible. You cannot be outside the single market and shape its legal order.”

Mr Davis shot back: “I would not confuse a belief in the free market for nostalgia.”