Unclear Brexit Creates ‘Trust’ Issues Exist For EU’s Barnier With Respect To The U.K.

Demanding that Theresa May’s government make its positions on Brexit clear so talks can start making progress, in the space of a week, the European Union’s chief Brexit negotiator, Michel Barnier, issued his second stern warning to the U.K.

“We can’t remain idle as the clock’s ticking,” said an exasperated-sounding Barnier, when he briefed journalists in Brussels on Wednesday. “We need to know on which points we agree and on which points we disagree so that we can negotiate in earnest.”

The EU is still confused about what Britain’s red lines are and where it will compromise after more than three months since the two-year countdown to the U.K.’s departure began, and Britain officially triggered the start of Brexit talks.

The rights the U.K. would give to EU citizens in Britain after Brexit and Britain’s financial obligations to the EU are the two issues that negotiators want to settle first and ones on which the uncertainty is focused. Before preliminary talks on a trade agreement can begin, penciled in for later in the year, the U.K. needs “sufficient progress” on these, as well as the status of the border with Ireland.

But Britain was unclear about its ambitions, it was unthinkable that such talks could start, Barnier said.

“How do you build a relationship that is going to last with a country where you don’t have trust? How would you do that?” Barnier asked. “Trust means giving security to the 4 million British and European citizens; it means settling accounts.”

One of the most contentious issues was always going to be the so-called Brexit bill. As they push the U.K. to cover past budget commitments EU officials have indicated it could run as high as 100 billion euros ($115 billion) in gross terms.

And also adding to a sense of alarm in Brussels about the distance between the two sides so early in the process is the U.K.’s published position paper on citizens’ rights, which falls some way short of EU demands.

Negotiations are scheduled to resume in Brussels on Monday. Following a first round of talks last month, it’ll be the second time that officials on both sides meet face to face. In addition to the leaders of the Scottish and Welsh governments, Barnier is scheduled to meet the head of the U.K.’s opposition Labour Party, Jeremy Corbyn in Brussels on Thursday.

The U.K. will be forced to accept World Trade Organization rules and sever all ties with the EU if it does not get a deal and it is set to leave the EU in March 2019 whether it gets a deal or not.

Since the start of July, Wednesday’s warning was Barnier’s second. Saying however positive the deal is for Britain it’ll still have “significant consequences”, the British government was cautioned against thinking that any settlement could result in a “frictionless” trade relationship, by him last week.

By saying he was still unsure whether the U.K. government has accepted it must foot a bill, Guy Verhofstadt, the European Parliament’s Brexit coordinator, struck a similar tone earlier on Wednesday.

“This uncertainty has, in my opinion, to disappear the fastest as possible,” Verhofstadt told the Parliament’s constitutional affairs committee in Brussels.

(Adapted from Bloomberg)

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Categories: Economy & Finance, Geopolitics

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