Brexit talks at 'deadlock' on financial settlement says EU's chief negotiator
The EU's chief Brexit negotiator Michel Barnier has said he will not recommend that talks should start on the post-Brexit UK/EU trade relationship at next week's European Council summit.
Mr Barnier said this week's fifth round of negotiations ended without making any "great steps forward" and there was "deadlock" on the UK's financial settlement.
He told a press conference in Brussels at the conclusion of the four-day talks: "On this basis I am not able in the current circumstances to propose next week to the European Council that we should start discussions on the future relationship."
Mr Barnier's comments represent a setback to the UK Government, which had been hoping to persuade the remaining 27 EU leaders at the October 19 summit that sufficient progress had been made on the divorce deal to move on to discussions on the future UK/EU relationship on issues including trade.
Mr Barnier told a closing news conference in Brussels the talks had "clarified" some issues but that more needed to be done.
"We clarified some points without however making any great steps forward," he said
But there was "still disagreement" on how to resolve issues about citizens' rights after Brexit.
And he said there was "deadlock" on the issue of the scale of Britain's financial settlement, a subject on which there were no negotiations this week.
Mrs May's announcement in her Florence speech that Britain would honour commitments entered into as an EU member was important, he said.
But he added: "This week, however, the UK repeated that it was still not ready to spell out these commitments.
"There have therefore been no negotiations on this subject. We confined ourselves to technical discussions - useful discussions, but technical discussions.
"On this question we have reached a state of deadlock which is very disturbing for thousands of project promoters in Europe and it's disturbing also for taxpayers."
Mr Barnier held out the hope for progress by the time of the December summit of the European Council.
But he insisted the EU would not make "concessions" on the three key withdrawal issues of expats' rights, the status of the Irish border and the UK's financial contribution.
He said it was vital that the final relationship between the UK and the EU was based on "confidence", adding: "Confidence must follow from clarity and the honouring of all commitments we have entered into together as the 28."
Mr Barnier said: "We are not asking the British to make concessions. The agreement we are working on will not be built on concessions.
"There is no question of making concessions on citizens' rights. There is no question of making concessions on the peace process in Northern Ireland.
"As regards the financial settlement, there is no question of making concessions on thousands of European investment projects throughout Europe."
He added: "We have shared objectives and we have shared obligations. We also have shared duties and we shall succeed only with shared solutions. That is our responsibility.
"I've been saying since the Florence speech that there is a new momentum, and I remain convinced today that with political will, decisive progress is within our grasp in the next two months."
Mr Barnier said negotiations on the status of the Irish border had "advanced" during this week's discussions.
But he said there was "more work to do in order to build a full picture of the challenges to North-South co-operation resulting from the UK - and therefore Northern Ireland - leaving the EU legal framework".
Brexit Secretary David Davis said while there was still much work to be done, the talks had made "significant progress" since June.
On the issue of citizens' rights, he said they were confident there would be agreement "soon" on incorporating the final withdrawal treaty into UK law, ensuring EU nationals in the UK would be able to enforce their rights through the UK courts.
EU citizens would still have to register with the UK authorities but the process would be streamlined to make it as simple as possible.
Those already in possession of a permanent residence card would be able to exchange it for "settled status" without having to go through the full application process again, he added.
Mr Davis said the Government had undertaken a "rigorous examination" of the technical details needed to reach a financial settlement.
"This is not a process for agreeing specific commitments," he said.
"We have been clear that can only come later but it is an important step so that when the time comes we will be able to reach a political agreement quickly and simply."
The Brexit Secretary said to give certainty "we must talk about the future" and called on EU leaders to change Mr Barnier's negotiating mandate.
"I hope the leaders of the 27 will provide Michel with the means to explore ways forward with us on that and build on the spirit of co-operation we now have."
Mr Barnier said the EU was ready to face "any eventualities" but warned that failure to secure an agreement would be a "bad" outcome.
"No deal will be a very bad deal," he said.
The negotiator said his mandate in the talks was "precise" rather than "restrictive".
He dismissed calls to change the running order of the negotiations.
"To make a success of the negotiations we have got to do things in the right order," he said. "That is a condition of success.
"If we mix everything up, there are risks."
Mr Davis said the UK was aiming for a deal but had to be ready for the alternatives.
"As the Prime Minister said yesterday, the UK is planning for all outcomes. It's not what we seek, we want to see a good deal, but we are planning for everything.
"It's the duty of a responsible government to plan for all scenarios, however improbable, and that's what we are doing.
"When money needs to be spent, it will be spent, when it needs to be spent."