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12 October 2017

Bloomberg: Brexit talks deadlocked as both sides prepare for cliff edge

The European Union said talks hit an impasse over what the UK owes when it leaves, increasing the chances of a messy departure as time is running out to clinch a deal.

The pound fell to the weakest in a month after chief EU negotiator Michel Barnier said there had been no discussions over the all-important bill that the U.K. has to agree it will pay before the EU will start trade talks.

Barnier put the onus firmly on the U.K.’s squabbling government to find the political will to move the talks forward, while both sides raised the prospect of talks breaking down without an agreement -- throwing businesses into a chaotic legal limbo.

“No deal will be a very bad deal, huh? And to be clear on our side we will be ready to face any eventualities and all eventualities,” Barnier, told reporters in Brussels on Thursday. After his words, the pound traded down by as much as 0.6 percent against the euro.

On the question of the financial settlement -- the most intractable of the three pressing issues -- Barnier said: “We have reached a state of deadlock which is very disturbing for thousands of project promoters in Europe and it’s disturbing also for taxpayers.”

Barnier noted that Prime Minister Theresa May had pledged in her speech in Florence last month that the U.K. would continue to pay into the EU budget for two years after the split.

He signaled disappointment that this wasn’t followed up in the negotiations this week. But in return for those payments, May wants a two-year transition period to ease the anxiety for businesses.

Different Interpretation

But the U.K. understood his words as an elegant cry for help from the Frenchman to the 27 European leaders, according to a person familiar with the U.K. team’s negotiating position: a plea to them to loosen up his mandate so he can start talking about the future alongside the divorce terms. [...]

Full article on Bloomberg

Press statement by Michel Barnier following the fifth round of Article 50 negotiations with the United Kingdom

David Davis' closing remarks at the end of the fifth round of EU exit negotiations in Brussels

© Bloomberg

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