British Prime Minister Theresa May is planning to appeal to her counterparts in the European Union to try to break an impasse in Brexit talks.

After four days of negotiations, the third round of formal exit discussions between London and Brussels, the two sides are as wide apart on the key issues as they were before, acknowledge British and EU officials.

Officials said the talks were at a “standstill” and “deadlocked.”  Each side is blaming the other for the impasse.  Europeans say the British remain unclear about what they want, while the British argue the EU negotiators’ insistence on agreeing on the terms of departure before negotiating a free trade deal is artificial and unhelpful.

Remaining stumbling blocks include a reported $89 billion “divorce bill” Brussels is demanding for the British departure to cover budget payments, and project and structural loans Britain committed to in 2013, long before last year’s Brexit referendum.  The British say the EU sums don’t add up, but EU officials dismissed a British demand for flexibility in the negotiations.

Basis for compromise?

An exasperated Michel Barnier, the chief EU negotiator told reporters, “To be flexible you need two points, our point and their point.  We need to know their position and then I can be flexible.”

Guy Verhofstadt, the European parliament’s Brexit coordinator, seconded Barnier’s remarks, arguing, “If only one party around the table is putting [out] a position and the other party is not responding, then it is difficult to start a negotiation.”

Verhofstadt says it is highly unlikely the negotiation timetable will be met.  The two sides are to have made substantial progress towards a departure agreement by October or trade talks can’t begin, as far the European Union is concerned.

Analysts say the British don’t want to agree to a settlement bill until they’re convinced they can secure a preferential free trade deal shaped to their liking.  The Europeans see the divorce costs and a future trade agreement as two separate things.

But there are no signs Britain is prepared to change its negotiating strategy.  Speaking Thursday during a visit to Japan, May said, “I think a good trade deal is not just about the UK, it is about what is good for businesses in what will be the 27 remaining states of the EU as well.”

While acknowledging Britain has financial obligations on departure, she added, “I think it is in all our interest to move on to those trade talks and to get a good deal.”

Border concerns

The Brexit talks have been laced with distrust and suspicion, acknowledge officials, with British and EU negotiators ready to identify even apparently trivial oversights as ways to gain an edge in the discussions.  Former European Commission president Roman Prodi warned earlier this month the talks headed by Britain’s Brexit minister David Davis and Barnier had got off to a very bad start with “blood on the floor.”

The two sides have also made little progress on the long-term rights of more than two million European citizens and their families living in Britain and the estimated 1.3 million Britons residing in EU countries.

Nor is there any agreement yet on what will happen with the border between Northern Ireland and the Republic of Ireland, Britain’s only land frontier with the European Union.  Dublin and politicians in Northern Ireland, which along with Scotland voted against Brexit, oppose the return of a hard border between the north and south of the island.  And there are fears that anything short of an open border risks triggering a revival of violent Irish republicanism.

Ireland has threatened to veto any moves towards trade negotiations until they are satisfied about cross-border arrangements.

Internal disagreements

Some former British officials have criticized the British government’s strategy.  They say it is a reflection of the sharp rifts within Theresa May’s Cabinet, as well as the wider Conservative Party and Britain’s Parliament, over whether the country should remain a member of the EU single market and customs union after Brexit, despite having to accept rules and regulations from Brussels that London will have no influence on shaping.

The influential chancellor of the exchequer, (finance minister) Phil Hammond, backed by many of the country’s top business people, is trying to maneuver the ruling Conservatives away from a so-called “hard Brexit” and a definitive break with Europe.

Opinion polls suggest British voters are becoming skittish over Brexit, possibly in reaction to increasingly bad news about the British economy, which is now the world’s worst performing major economy.

Rising concerns about post-Brexit economic prospects and their future status in Britain is likely to prompt an exodus of up to half the Europeans residing in Britain.   A million EU citizens, many highly educated and qualified, are planning to leave the country because of Brexit, a study by KPMG, the professional services firm, has found.
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