EU Mulls Starting U.K. Trade Talks Before Fixing Brexit Bill Sum


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European governments are considering granting U.K. Prime Minister Theresa May political cover by allowing Brexit talks to advance to trade before the two sides agree to a specific exit fee, two people familiar with the plan said.

Such a concession could mean May is able to start engaging with the EU on the “bold and ambitious” commercial accord she wants at a December 14 summit, by which time the new German and French governments should both be in place, said one of the officials.

QuickTake How Does U.K. Want to Trade With EU Post-Brexit?

While the other 27 EU nations want Britain to agree to settle its financial obligations to the bloc before they move on to trade, they are aware that a fixed sum, especially if large, could make it hard for May to maintain support at home among those who campaigned most ardently for Brexit. The solution is instead to focus on getting both sides to establishing a method for calculating liabilities rather than get bogged down on the amount, the people said, asking not to be named, as the bloc’s negotiating strategy isn’t public.

EU demands that Britain fully repays all outstanding and contingent financial commitments resulting from its membership of the bloc is still set to prove the most toxic of topics in the Brexit negotiations. Continental leaders gather in Brussels on Saturday to sign off on a set of general negotiating guidelines for the talks, a draft of which explicitly calls for the U.K. to respect its “obligations” and says they should reflect its whole period of membership. 

“We will not discuss our future relations with the U.K. until we have achieved sufficient progress on the main issues relating to the U.K.’s withdrawal from the EU,” European Council President Donald Tusk said in a letter to the bloc’s leaders made public on Friday. This phased approach “is not only a matter of tactics, but — given the limited time frame we have to conclude the talks — it is the only possible approach.”

Read more: Where the U.K. and EU Currently Stand

A sum of 60 billion euros ($65 billion) has been mooted by EU leaders although that could run higher if they try to extend payments beyond Britain’s withdrawal date of March 2019. May’s government has said it’s willing to agree to a “fair settlement” although it has questioned the size and legality of a bill and indicated it will try to win back a share of EU assets. The challenge for May is that failure to make progress on the finances will prompt the EU to hold back on discussing the trade deal she wants.

In addition to the approval of the negotiating guidelines, the Brussels summit will also debate the content of a joint political statement. European leaders will recognize that in the event of a united Ireland, Northern Ireland would become part of the EU, according to a draft obtained by Bloomberg News. Both the Irish and U.K. governments have said there’s no plan for a poll on reunification anytime soon.

The European Commission is scheduled to circulate on May 3 a more detailed mandate for chief negotiator Michel Barnier, which national governments will also need to approve, while substantial negotiations on the terms of separation will only start after the U.K. elections on June 8.

Assuming sufficient progress has been made by fall on defining the terms for the calculation of the exit bill and the status of citizens, EU leaders will probably allow for talks on the future relationship between the two sides to begin when they meet in Brussels on December 14, the official said. That will be the first time that the new president of France and the Chancellor of Germany, following September’s elections, will sit at an EU summit table.