European Commission president Jean-Claude Juncker has said the Brexit process will take “longer than we initially thought”, blaming delays on Britain’s failure to settle its financial obligations.
Speaking to students at the University of Luxembourg, Mr Juncker said the nations of Europe should be grateful for what Britain had done “during war after war”, but added: “Now they have to pay.”
Mr Juncker was speaking after the EU’s chief Brexit negotiator, Michel Barnier, said talks on issues including the “divorce bill” had not made sufficient progress for him to be able to recommend moving on to the second phase of negotiations, covering trade.
Mr Barnier said the financial settlement had not even been the subject of negotiations during four days of talks this week because the UK was not prepared to indicate how much it was willing to pay.
However a leaked document seen by reporters in Brussels suggested that EU leaders meeting at the European Council summit next week could authorise “internal preparatory discussions” on the shape of a future trade relationship and a transition deal, in a move which could offer Prime Minister Theresa May hope for talks by the end of the year.
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Mr Juncker said: “The first to be impressed by the enormous disadvantages that Brexit ... is entailing are the British. They are discovering, as we are, day after day new problems. That is the reason why this process will take longer than initially thought.
“We had the idea that we would clear all the questions related to the divorce. It is not possible.”
On the question of Britain’s “divorce bill” - which he previously suggested could come to around £50 billion - Mr Juncker said: “We can’t find for the time being a real compromise as far as the remaining financial commitments of the UK are concerned.
“As we are not able to do this, we will not be able to say during the European Council in October that now we can move to the second phase of the negotiation, which means the shaping of the Britain/Europe future.
“If you are sitting in a bar and ordering 28 beers and then suddenly one of your colleagues is leaving and is not paying, that is not feasible. They have to pay.
“They have to pay, not in an impossible way - I am not in a revenge mood, I’m not hating the British.
“Europeans have to be grateful for so many things that Britain has brought to Europe, during war after war, before, everywhere and every time. But now they have to pay.”
Mr Juncker called for an immediate resolution to the issue of the post-Brexit status of EU citizens living in the UK and Britons on the continent, saying that they should simply be allowed to retain existing rights.
He said that negotiators were “making progress” on the issue at talks which have been running since June in Brussels.
But he added: “I don’t even understand this problem. Why not say easily, with common sense, that things will stay as they are?
“The European `foreigners’, as they are saying in London, are there on the island and so many British friends are here. So let them (stay) here and let them (stay) there.
“Why are we discussing nonsense like that? Citizens have rights because of being citizens, not because there is a Brexit issue which has to be discussed.”
The draft conclusions for for the October 19 summit, leaked in Brussels on Thursday evening, call for work to continue to achieve “sufficient progress” on withdrawal issues of a financial settlement, the Irish border and citizens’ rights, to unlock the second stage of talks to focus on trade.
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But the document, which is subject to change by the leaders of the 27 remaining EU states, warns that Britain has not made a “firm and concrete” commitment on what Brussels sees as its financial obligations.
It echoes Mr Barnier’s concerns that a “disturbing” deadlock over the size of Britain’s exit bill means it is not yet time to move on to negotiations over the future UK/EU relationship.
His recommendation has made it all but certain that trade talks will be delayed at least until the end of the year, heightening pressure on the UK Government to make preparations for a possible “no-deal” Brexit.
But the draft paper offered signs of hope that Mr Barnier and EU states could at least begin exploring trade and transition arrangements, with the aim of moving on to those issues if agreement can be reached at December’s Council summit.
At Westminster, Labour called for Mrs May to change its flagship Brexit legislation, claiming that the EU (Withdrawal) Bill was not going before the Commons next week because the Government was afraid pro-Europe Tory rebels would rebel on a series of amendments.
Shadow Brexit secretary Sir Keir Starmer told the BBC: “The Tories’ Repeal Bill is simply not fit for purpose. It would give huge and unaccountable power to ministers and puts vital rights and protections at risk.
“Theresa May must start listening to the legitimate concerns of Labour and some of her own MPs by urgently changing approach.”
Meanwhile, an aide to the Treasury’s ministerial team dismissed calls by Tory grandee Lord Lawson for Chancellor Philip Hammond to be sacked.
Former chancellor Lord Lawson accused Mr Hammond of undermining Brexit negotiations, claiming that his refusal to release money now for preparations for a no-deal Brexit was “very close to sabotage”.
But Chris Philp told BBC Newsnight: “That’s nonsense. Nigel Lawson was a great chancellor in the 1980s, but that was 30 or 40 years ago, and he certainly doesn’t speak for the modern Parliamentary Conservative Party.”