Brexit 'divorce bill' from European Union to be settled ahead of trade talks

Posted June 23, 2017

Britain and European Union hope the first phase of talks focusing on the exit terms will conclude by October, allowing trade negotiations to begin.

The EPP leader's statement follows the start of the negotiation talks between Brexit Secretary David Davis and the EU27 Chief Negotiator Michel Barnier in Brussels on 19 June.

The UK agreed to settle the issue of citizens" rights, borders and the so-called "divorce bill' with the European Union before discussions over trade begin, when formal Brexit negotiations finally got under way in Brussels on Monday.

The manoeuvring came after Conservative Prime Minister Theresa May emerged wounded from a general election setback this month, which has strengthened the hand of cabinet moderates such as Hammond.

Frenchman Barnier struck a firm tone as he said the timetable for Britain's divorce after four troubled decades of membership made sense.

Mr Barnier spoke at a press conference after the first day to confirm that settling priority issues would build "trust on which to negotiate a new relationship".

"We acknowledge that, as Britain leaves the EU, there are genuine and reasonable concerns among our EU colleagues about oversight of financial markets that will then be outside EU jurisdiction". But it must be done in a way that works for Britain ...

"There may well be the need for certain transitional periods, some of them which will involve phasing out, others potentially phasing in", Barnier told reporters in Luxembourg after a meeting of European Union affairs ministers. A fair deal for both sides was possible, he said.

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Britain, the EU's biggest financial market, was leaving the bloc in 2019, raising the prospect of an abrupt cut in cross-border links without a new trade deal.

Davis said Britain's negotiating position had not changed as a result of his Conservative Party's poor showing in recent elections. With now only 21 months to sign and ratify the exit deal, there is a limited time for any trade agreement.

The election had been called by the Conservative Party with the intention of consolidating its hold over United Kingdom politics.

In his first major comments in six weeks, he also said he wants to see how the economy responds to the "reality of Brexit negotiations".

In Berlin, German Chancellor Angela Merkel emphasised the unity of the remaining 27 European Union countries, who have been alarmed in recent weeks by May's threats to walk out of the talks. "But the 27 of us will formulate our interests very clearly and hopefully, together", Merkel said.

"So we must be clear about ours".

Macron, a committed pro-EU leader and ally of Merkel, also easily won French legislative elections on Sunday, cementing his power base.

It means the divorce terms will be set first, before discussions on future trade relations.