EU Officials Warn of Risk of U.K. Leaving Brexit Talks Early, Sources Say

  • Spain says negotiations may flop over Britain paying exit bill
  • Barnier sees some U.K. lawmakers trying to undermine talks

U.K. to Face Two Years of Talks After Brexit Trigger

European Union officials are calling for the bloc to prepare for the U.K. to walk out of Brexit talks without a deal, according to a private memo and people familiar with the discussions.

At a meeting of regional diplomats in Madrid last week, Spanish officials said a breakdown in negotiations was feasible in light of comments made by British Prime Minister Theresa May. The EU should prepare for such a scenario, according to a memo summarizing the Spanish position seen by Bloomberg.

EU negotiator Michel Barnier also told a meeting of EU commissioners in Brussels on Wednesday that the bloc should ready itself for talks failing, according to two people familiar with the private discussion. Barnier noted some Conservative politicians in the U.K. are already trying to undermine efforts to find common ground.

May is set to trigger two years of divorce talks on March 29. A likely source of early discord is the bill to cover the U.K.’s liabilities to the bloc which Austrian Chancellor Christian Kern has said could run to 60 billion euros ($65 billion).

In a subsequent speech to the Committee of the Regions, Barnier said the U.K. “must settle the accounts” when it leaves and that it won’t be asked “to pay a single euro for something they have not agreed to as a member.”

He warned that a failure to strike a pact would have “serious consequences” including greater uncertainty for U.K. citizens living in the EU, supply problems for companies, air-traffic disruption, tougher custom controls and no more circulating of nuclear material.

Read more: What’s next in the Brexit process

U.K. officials question both the bill’s size and whether there is any legal requirement for them to pay anything. The EU side says a payout must be resolved before it engages with May over the sweeping trade deal she wants, and that it’s willing to go to the International Court of Justice to adjudicate the matter.

The memo also said Spain estimates that the U.K. should keep making contributions to the EU budget until 2023, which may irritate pro-Brexit lawmakers in the U.K. who are pushing for a clean, swift break.

“Before starting to negotiate the future framework of the relationship between the EU and the U.K., we have to agree at least the basic principles of the financial implications of the exit agreement,” Jorge Toledo, Spain’s deputy minister for European affairs, said on Tuesday.

That position was echoed the same day by German Finance Minister Wolfgang Schaeuble, in a sign of unity across the continent. “The EU has accepted many obligations during the time when the U.K. was a member, for which the member states are liable,” he said. “These liabilities don’t expire with the departure.”

May said in January she would be willing to walk out of the talks on the basis that “no deal for Britain is better than a bad deal for Britain.” That would, though, leave it at risk of World Trade Organization tariffs and other barriers to trade as soon as the U.K. leaves the bloc in March 2019.

— With assistance by Ian Wishart, and Jonathan Stearns

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