Speaking to reporters in Brussels after the latest round of talks, Barnier said he could not understand the positions taken by Downing Street in recent days.
No 10 wants to treat EU citizens arriving in the UK during the transition period differently to those already living in the country. The UK is also seeking a right to object to the application of new EU laws.
Barnier suggested that unless Downing Street gave way, the differences between the two parties could be insurmountable.
“When I met [the Brexit secretary] David Davis in London on Monday and once again in negotiations in Brussels this week, the UK insisted that we should reach an agreement in March on this transition period,” Barnier said. “At the same time, however, our partners set out a certain number of disagreements which I regard as substantial … To be quite frank, if these disagreements persist the transition is not a given.”
He added: “I don’t understand some of the positions of the UK.”
Barnier claimed a presentation on the UK’s vision of the future relationship had been cancelled by the British government on Friday morning due to what to he described as “diary constraints on the UK side”. Government sources denied the claim and insisted a discussion would happen later on Friday.
Responding to claims from Davis that the EU had been “discourteous” in including a punishment clause in its terms for a transition period, giving it the ability to sanction the UK if it infringes EU laws during the 21 months, Barnier said: “I am not going to discuss David’s comments. It would not be useful … I don’t really understand why there was this reaction, this uproar.”
He confirmed the Guardian’s report that, under the draft withdrawal agreement, Northern Ireland would in effect stay in the single market and customs union where relevant to the north-south economy and Good Friday agreement.
“We are working with the UK on this full alignment. We will be working on those matters in the next few weeks.”
The value of the pound to the dollar took an immediate dive after Barnier’s comments, indicating the importance of a transition period to businesses in the UK.
This article was written by Daniel Boffey and Jennifer Rankin in Brussels, for theguardian.com on Friday 9th February 2018 12.43 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010