Fears are growing in the Government that political uncertainty in London and growing impatience in the EU are together increasing the prospect of a very hard Brexit, although Dublin believes that a breakthrough before Christmas is still possible.
The latest round of talks between the UK and the EU negotiating teams finished in Brussels yesterday with no sign of the progress hoped for by the British after Theresa May’s Florence speech.
Next week's EU summit will hear EU lead negotiator Michel Barnier warn of a "disturbing" impasse in discussions on the UK's Brexit bill.
“I am not ready to propose to the European Council to open negotiations on the future relationship,” he told a press conference in Brussels yesterday after the conclusion of the talks.
Sources close to the talks said there was little British engagement this week as the UK had been wrongfooted by the EU’s tepid response to Ms May’s speech in Florence.
Ms May’s political weakness has now become a factor in the talks, with the EU side aware that the final deal is likely to be made with her successor.
It had been hoped that the October summit would decide that “sufficient progress” had been made on the separation agreement thus allowing talks on the future trading relationship to commence.
Divorce bill
The EU has refused British requests to talk about the future trading relationship until it is happy that there has been progress on Irish issues, the rights of EU citizens in the UK and the “divorce bill” the UK will pay.
Now the “sufficient progress” test will be postponed to December, although the snail’s pace of talks and the substantial differences to be overcome suggest it may not even be possible then.
Brussels insiders say the negotiating timetable is now getting very tight. Mr Barnier has spoken of the need to complete discussions by October next to allow ratification by national parliaments ahead of the UK’s departure from the union in March 2019.
Irish Government sources are cautiously optimistic that the EU summit in December will decide that “sufficient progress” has been made to allow the trade talks to begin. This phase will be crucial for Ireland, as the type of border – including the questions of customs checks – will not become clear until the future trade relationship between the EU and the UK is settled.
However, there are growing fears in Dublin that rising impatience with the British in Brussels – and in Paris and Berlin – might embolden Tory ministers and MPs in London who favour a hard Brexit.
When the EU-27 leaders meet next week to review the talks there will be some pressure to explore ways of unblocking the process by providing a roadmap to those second-phase discussions, specifically by exploring the possibilities of talks on the UK’s transition from the union.
Sufficient flexibility
The challenge, one diplomat said, was to give Mr Barnier sufficient flexibility in his mandate to broach transition issues without, in doing so, removing the pressure on the UK to make concessions on the critical “divorce” issues.
There is a growing sense in Brussels that transition discussions may be key to unblocking some of the impasses in the divorce talks.
In a statement issued last night, Taoiseach Leo Varadkar said there has been "some progress this week, but it is limited".
“Mr Barnier’s comments that he does not believe sufficient progress has been made is therefore not a surprise.”
Mr Varadkar said the focus now “must be on making enough progress between the October and December European Councils so that talks on the future relationship can begin.”
One key and difficult dimension of the Irish talks that has yet to be broached is the insistence by Ireland that the UK explains how it intends in principle to sustain the frictionless, soft border it says it wants on the island.
