24th Mar 2018

UK and EU stuck on 'philosophy' of Brexit bill

The lack of a UK position on a financial settlement with the EU is one of the main obstacles to any progress in the Brexit talks, the EU's chief negotiator, Michel Barnier, told member states' representatives this week.

The French politician warned that if the talks proceeded at the same pace after the summer break as they have down so far, then a self-imposed deadline of October to reach a political agreement on key issues would be unlikely.

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The UK acknowledged two weeks ago that it would have to pay to meet its commitment upon leaving, but it has so far presented no detailed position.

The expectation is that the UK government will be reluctant to do so before the Conservative Party congress in early October.

“The EU would like to see how much is what they have in mind,” an EU official said.

But there is also a "philosophical" issue between the UK and the EU on how to settle the accounts.

The UK is looking to see what it can get from the EU in return for its money, in effect paying for the quality of future relations with the EU. On the other side, the EU is focusing on making the UK settle previous commitments during Brexit talks, the source said.

The EU on the other sees the financial settlement as rooted in the past, not the future.

It wants the UK to pay for previous obligations, such as the EU budget.

But the UK has so far listed a number of objections to how the EU intends to calculate the amount the UK owes the bloc.

London, for instance, would only want to pay for projects from the EU budget that have been contracted, not just pledged to an implementing partner.

The suggestion by Philip Hammond, the chancellor of the exchequer, for a transitional period until 2022 could bridge some of the financial issues.

Hammond told the BBC on Friday (28 July) that the UK should move gradually towards a new relationship with the EU.

His suggestion could point to a Norway-like scenario for a limited period of time for the UK.

It would temporarily solve such contentious issues as the jurisdiction of the European Court of Justice, or the financial settlement.

The UK would keep contributing to the EU budget for this cycle, meaning that other member states would not have to chip in, which would help in keeping the so far unprecedented unity of the 27.

Barnier also told EU ambassadors that there were only a few differences in the citizens’ rights file, but that those were significant and would be difficult to overcome.

The underlying difference is the different approach in enforcement: the EU wants the continuation of EU law, while the UK wants to base them on British law, making it impossible for citizens to turn to the European Court of Justice if some of those rights were breached.

The UK has so far presented its position on citizens’ rights, on ongoing judicial proceedings, on Euratom, the bloc’s nuclear energy treaty, and on the privileges of EU agencies and bodies in the UK.

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