Photo Illustration: Tom Hall/Bloomberg

Brexit Bulletin: Deadlock

  • Brits pick holes in EU’s divorce bill proposals without offering their own
  • Barnier and Davis due to hold news conference around noon on Thursday

Sign up to receive the Brexit Bulletin in your inbox, and follow @Brexit on Twitter.

Brexit talks are pretty much deadlocked.

That’s the assessment of people familiar with the U.K. position, while European officials, including chief negotiator Michel Barnier, continue to vent frustration with the Brits in public. 

Talks have barely started on the divorce bill: the British haven’t disclosed their position and have instead spent negotiating sessions poking holes in the EU’s arguments. The role of the European Court of Justice remains a major obstacle, even after the U.K. government’s concession this month that it was only trying to escape the “direct” jurisdiction of its judges. On smaller matters too, the U.K. accuses the EU of interpreting the rules — and its negotiating mandate — too narrowly, blocking progress.

All this reduces the chances of an October summit deal that would allow talks to move on to trade. It also raises the pressure on Prime Minister Theresa May to pull something out of the hat for that meeting. Guy Verhofstadt, the European Parliament’s Brexit coordinator, said on Wednesday that if the pace of talks doesn’t change “it will be very difficult to say there is sufficient progress” in October.

Flexibility is the Brits’ buzzword. But Barnier said he can’t show flexibility until he knows in which direction he’s being asked to bend.

“To be flexible you need two points, our point and their point,” Barnier told reporters on the sidelines of talks in Brussels on Wednesday. “We need to know their position and then I can be flexible.”

And while they’re asking for flexibility from others, May is sticking to the same script she’s had since January. Her cabinet may have come toward a consensus over the summer on issues such as the need for a transition, but May continues to reference her landmark Lancaster House speech on any Brexit question. “We’re leaving the EU,” she said yesterday when asked about staying in the single market during a transition.

With talks wrapping up, Barnier and Britain’s David Davis are due to hold a news conference around midday in Brussels (11 a.m. London).

Michel Barnier
Photographer: Dario Pignatelli/Bloomberg

Brexit Latest

May to Stay | May tried to convince people she’s no lame duck by insisting she intends to lead her Conservative Party into the next election. Her own lawmakers chuckled at the idea.

Japan Hopes | Prime Minister Shinzo Abe says Brexit has to be transparent and predictable to limit the damage. The U.K. will continue to be attractive after the split, he said in Tokyo alongside May, who is on a three-day trip to Japan. May said the U.K. would continue to champion the EU-Japan trade deal, which she then wants to replicate for the U.K.

Commission Warning | The European Commission has warned member states again to resist lobbying by the British government at all levels, Handelsblatt reports. It cites a German parliamentary report saying that talks may yet fail and a U.K. position paper on the exit bill isn’t expected.

Frankfurt Win | UBS Group AG is leaning toward Frankfurt for its trading headquarters inside the European Union after Brexit, while Standard Chartered Plc is planning to create about 70 jobs in Frankfurt, according to people familiar with the plans. 

Brexit Bargains | Brexit could offer opportunities to buy U.K. commercial real estate with the market in flux, according to Australia’s largest pension fund.

Barometer Plunges | The Bloomberg Brexit Barometer, which tracks the health of the U.K. economy, fell sharply on Wednesday as the atmosphere soured around the talks in Brussels. The index slumped into “windy” territory.

And Finally...

It was a caption-writer’s dream. May’s photo opportunity at a Japanese tea ceremony prompted predictable ribbing on Twitter. But the Evening Standard, edited by May’s rival George Osborne, had the most fun: “begging bowl?” it suggested.

Theresa May, takes part in a tea ceremony with Shinzo Abe, in Kyoto on Wednesday.
Photographer: Carl Court/Getty Images

Simon Kennedy is away.

For more on Brexit follow Bloomberg on Twitter, Facebook and Instagram

    Before it's here, it's on the Bloomberg Terminal.