The EU is toughening its Brexit negotiating stance after consultation with member states, further downplaying hopes of a trade agreement before the UK leaves while insisting that Britain settle its divorce bill in euros rather than sterling.
Leaked documents reveal the EU’s position has hardened in recent weeks since the publication of the European council’s draft guidelines, which offered an indication of the bloc’s opening stance last month.
The European commission expects Britain to pay its estimated €60bn (£50bn) in liabilities in euros, leaving it to risk the currency markets at a time when the pound has been weak, according to a paper seen by Politico.
It also expects the UK to cover all the relocation costs associated with the two EU bodies currently based in London, the European Medicines Agency and the European Banking Authority.
“The United Kingdom should fully cover the specific costs related to the withdrawal process such as the relocation of the agencies or other union bodies,” a draft of the European commission’s detailed directives for the EU’s chief Brexit negotiator, Michel Barnier, says.
The UK’s financial obligations to the EU “should be defined in euro”, it adds.
The European council president, Donald Tusk, is to fire the starting gun on the contest between member states over the fate of the two EU agencies by the end of this month, with commission officials hopeful that new locations can be decided by June.
The commission’s final directives for Barnier will be adopted once leaders of the remaining 27 EU member states have approved the broader political goals the European council is currently developing. The 27 will meet to discuss th e so-called guidelines at an extraordinary summit in Brussels on 29 April.
According to the Financial Times, th e guidelines have also been tightened up to offer the UK even less hope of a good deal. The newspaper claimed the latest draft downplays the EU’s view of how soon it is willing to engage in discussions on a post-Brexit trade deal with the UK.
The original guidelines noted that the EU stood ready to start work before 2019 on the “ambitious free-trade agreement” requested by the British government. The revised text, according to the FT, notes the EU’s willingness to discuss “an agreement on trade”. A senior EU diplomat told the newspaper that the amendment was deliberately made to lower expectations.
The revised document also insists that the fate of the EU agencies based in the UK should be settled rapidly and Britain will have no say in their future home.
Almost all member states have notified the commission of their interest in taking one of the agencies, the latest being the Netherlands, whose prime minister, Mark Rutte, wrote to Tusk.
The Department for Exiting the European Union had claimed that the issue of the two agencies would be a matter for negotiations and their movement out of the UK had not been determined.
In a development that will do little for the atmosphere when the European commission president, Jean-Claude Juncker, visits Downing Street next Wednesday , the latest guidelines also highlight concerns about Britain’s treatment of EU nationals living in the UK.
There are worries about Britain’s requirement that EU migrants complete an 85-page form to prove they have permanent residen cy in the UK. The latest draft of the guidelines is said to insist: “Citizens should be able to exercise their rights through smooth and simple administrative procedures.”