Britain’s talks on leaving the European Union will resume on Monday amid a deepening standoff over the UK’s financial obligations.
As the Brexit secretary, David Davis, calls for “flexibility and imagination” to break the deadlock, senior EU diplomats say their chief negotiator, Michel Barnier, will find it difficult to make progress until they have agreed how to calculate the amount Britain must pay to leave.
Three and a half days of talks resume against the backdrop of a shift in policy from Labour and with both sides saying there is unlikely to be a major breakthrough.
Brussels is infuriated at Davis’s refusal to spell out how the UK’s liabilities to the EU should be calculated, let alone put a figure on the final bill estimated at €75bn.
Reports have suggested that ministers are ready to pay up to €40bn (£36bn) as the price of getting on with trade talks.
The EU has said any attempt by the British to defer a deal on Brexit money could lead to the collapse of the talks.
“If you leave big, sensitive political issues to the end of the negotiations – such as the financial settlement – you increase the risk of failure,” a senior official said.
One EU diplomat told the Guardian that money was “the major sticking point and the biggest obstacle to making progress”. The diplomat said: “The UK government does not want to be too clear because they are afraid of the hard Brexiteers.”
Despite the EU’s warning, Davis is expected to refuse to go into details before the EU places its own analysis of the expected bill upon the table.
UK sources said Barnier’s team has produced a paper outlining the basis for a Brexit payment but has not yet said on what this is based.
“We are waiting for them to produce a proper legal analysis that can be interrogated line by line,” a UK government source said.
“Fundamentally, this is a negotiation – we don’t want to pay anything more than what we owe – but it’s a discussion that needs to be based on the facts.
“They produced a paper. We want analysis, justification and facts,” the source added.
EU officials said they were looking forward to hearing the UK team’s legal analysis on the Brexit bill but voiced their frustration. “We are not yet in a situation where lack of time would prevent us from advancing, so far it is a lack of substance,” said one official.
The EU is also resisting attempts by the UK to change the sequencing of the Brexit talks. EU leaders have agreed on addressing the financial settlement, citizens’ rights and the Irish border before talks move on to trade.
Davis acceded to the timetable, but a blizzard of position papers from Whitehall in the last 10 days underscores that the UK is keen to discuss the future.
UK officials hope to discuss “technical issues” around the Irish border, customs issues and data protection.
Davis is expected to say on Monday that he wants to agree a deal which is in the best interests of both sides, and expects the talks to be “constructive”.
He will say: “For the UK, the week ahead is about driving forward the technical discussions across all the issues.
“We want to lock in the points where we agree, unpick the areas where we disagree, and make further progress on a range of issues.
“But in order to do that, we’ll require flexibility and imagination from both sides.”
So far the bloc of 27 countries remain united, including on money. At a preparatory meeting last Thursday, France and Germany stuck to their position that the UK should pay its share of the EU’s 2014-20 budget, agreed by the then-prime minister David Cameron.
The UK has accused the EU of “overegging demands” on the divorce bill, which also includes a share of EU pension liabilities and unpaid bills.
Money is shaping up to be the biggest stumbling block in the talks, though there was a sharp exchange on Ireland after London was accused of “magical thinking” with proposals for an invisible Irish border, which will be the UK’s only land frontier with the EU.
Citizens’ rights is less contentious, with agreement on half the issues, though the role of the European court of justice continues to be a sticking point.
The latest round of talks comes as the government is under pressure to clarify its position on any transition period after Labour made an important shift in its Brexit policy.
Labour’s Brexit spokesman, Keir Starmer, wrote in the Observer that the party was backing membership of the customs union and single market during a transitional period of two to four years.
The move is a recognition of the fact the EU will not agree to any special or “bespoke transition” that does not respect its rules, including free movement of people and the jurisdiction of the European court.
Negotiations resume at 5pm Brussels time on Monday and are expected to conclude on Thursday.
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