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Factbox: What progress? EU's price for Brexit breakthrough
November 29, 2017 / 3:26 PM / 17 days ago

Factbox: What progress? EU's price for Brexit breakthrough

BRUSSELS (Reuters) - The European Union has given Prime Minister Theresa May until Monday to raise Britain’s offer of divorce terms if she wants EU leaders to open talks next month on a future free trade pact.

Anti-Brexit protesters wave EU and Union flags outside the Houses of Parliament in London, Britain, November 14, 2017. REUTERS/Peter Nicholls

Britain has moved “close” to the EU demands on money, EU diplomats said on Wednesday, but there are concerns that differences remain on other key conditions.

These are the key points EU officials and diplomats say she must be ready to concede when she visits Brussels on Dec. 4.

FINANCIAL SETTLEMENT

The EU estimated at some 60 billion euros ($71 billion) what Britain should pay to cover outstanding obligations on leaving in March 2019. May has promised that the other 27 states will not lose out financially before the end of 2020 -- an indication Britain will maintain its current roughly 10 billion-euro annual payment to the EU during a two-year post-Brexit transition.

The EU wants May to commit to paying a fair share of two big budget lines after 2020 -- funds for projects approved during Britain’s membership but not yet disbursed, and staff pensions.

EU diplomats said negotiators had in recent days received assurances that this was the case and British newspapers put the offer at very roughly 50 billion euros. Phil Hogan, Ireland’s EU commissioner, said Britain’s new proposals “go very close towards meeting the requirements” of the EU. However, May’s spokesman dismissed as “speculation” the British media reports.

Both sides insist there can be no agreement on a hard figure yet and much will depend on future economic developments. But observers will be quick to make ballpark calculations. And EU leaders are set on binding May to a written commitment to pay specific elements of the bill to avoid haggling later on.

CITIZENS’ RIGHTS

The second of three conditions, on all of which “sufficient progress” must be recorded, that may now be the least problematic. However, the EU is still seeking further commitments from May that the rights of EU citizens in Britain after Brexit will be guaranteed under EU judicial supervision, not just British -- still a potential stumbling block to Britain’s agreement.

EU Brexit negotiator Michel Barnier repeated on Wednesday that European Court of Justice supervision was essential.

Member states, some of which have taken a tougher line than the Brussels negotiators, insist Britain also make concessions on family reunion rules and social benefits.

IRISH BORDER

The EU wants more detail on a British pledge to avoid a “hard border” at the new land frontier on the island of Ireland that might disrupt peace in Northern Ireland. London says the detail depends on the future trade agreement, which the EU will not discuss until after agreeing on sufficient progress. But Dublin has stepped up its complaints that assurances of good intentions from Britain do not go far enough.

EU officials say the broad possible outlines of a trade pact are already obvious and mean that a hard border can only be avoided if commercial regulation remains identical on either side. One solution would be for Northern Ireland to stay in a customs union with the EU. But Britain, and May’s crucial Northern Irish parliamentary allies, insist there should be no new barriers between Northern Ireland and the British mainland.

The EU says that means the whole of the United Kingdom would then have to maintain regulatory conformity, something Brexit campaigners do not want. Brussels and Dublin say Northern Ireland already has some different rules from Great Britain.

TIMETABLE

On Friday, Dec. 1, EU national envoys expect an update from Barnier and the negotiators. On Dec. 6, two days after May meets Barnier and European Commission President Jean-Claude Juncker, the EU-27 envoys meet to start drafting the conclusions for a summit on Dec. 14-15. They may need a whole week to secure all states’ agreement that there is “sufficient progress” -- or not.

At the summit, if they agree to move ahead, the 27 leaders could immediately discuss the roughly two-year transition period May has asked for -- which the EU says will mean Britain taking all EU rules but having no say in making them. They would also ask officials to complete work on formal negotiating guidelines for a future trade deal. There would need to be some weeks of further internal preparation in the EU before trade talks start.

Even with sufficient progress, detailed negotiation on the divorce deal -- or Withdrawal Treaty -- will continue. Barnier hopes to have a text by October or November next year to give time for ratification by the European Parliament by Brexit Day.

Barnier has said a trade deal could be launched by January 2021 if talks start after Christmas. But many EU diplomats say Britain may need further transition terms before one is ready.

Reporting by Alastair Macdonald; Editing by Gareth Jones

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