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Brexit talks: bad-tempered breakdown in sight as deadline looms | Dan Roberts

David Davis (left) and Michel Barnier (right)
David Davis (left) and Michel Barnier (right): ‘In the circumstances, it should be no surprise to see both negotiators beginning to look somewhat pursed-lipped.’ Photograph: Olivier Hoslet/EPA

It may have felt like Groundhog Day, but the fifth round of the increasingly tetchy Brexit talks on Thursday provided a glimpse into the future, and it wasn’t pretty.

The pound dropped abruptly when Michel Barnier announced that all they had achieved was a “very disturbing state of deadlock” over money. With it should go the hopes of millions of citizens stranded on either side of the Channel who were promised early guarantees that their lives would not be turned upside down in 18 months’ time.

At least the scales are falling from everyone’s eyes about how difficult it is going to be to keep this process from getting nasty as the deadline looms. Shorn of diplomatic niceties, the outlines of the impasse are now plain to see.

Britain wants to discuss its future trading relationship with the EU because 44% of UK exports go to, and 53% of imports come from, the EU 27 countries. Post-Brexit conditions of trade could, therefore, have a major effect on Britain’s economy.

The World Bank estimates UK trade with the EU in goods and services could fall by 50% and 62% respectively if no trade deal is agreed after Brexit, against 12% and 16% if the UK stays in the single market through a Norway-style agreement.

Clean Brexit campaigners say the shortfall can be offset through more trade with non-EU countries, but those who argue the UK must retain close links with the single market doubt this, certainly any time soon. Both groups want certainty.

However, the EU27’s negotiating guidelines for the two-year Brexit talks say discussion of the “framework” of a future relationship can only take place in phase two of the talks, once “sufficient progress” has been made on the separation phase and particularly the UK’s exit bill.

By insisting that Britain cannot talk about a future trade deal until it agrees everything else, the EU is effectively holding a gun to the UK economy in order to extract the maximum amount of cash and political concessions.

By refusing to provide water-tight assurances on the EU priorities in advance of such talks, Britain is in turn holding to ransom the rights of millions of EU citizens, tens of billions of euros in budget shortfalls and potentially peace in Northern Ireland.

In the circumstances, it should be no surprise to see both negotiators beginning to look somewhat pursed-lipped.

The British chancellor, Philip Hammond, warned of just such a dynamic only on Wednesday, when he told MPs that the UK should brace itself for the possibility of a “bad-tempered breakdown in which people are not working in their own economic self-interest”.

His warning that planes might not be able to fly after a disorderly Brexit may be the least of our concerns if passengers don’t have visas either and exporters can’t put their goods in the hold.

For this candour, Hammond was rewarded by a Daily Mail editorial calling for his resignation and accused of talking Britain down. But all sides are now talking about the need to imagine the worst and prepare for the prospect of negotiations breaking down entirely.

No deal will be a very bad deal,” said a grim-faced Barnier. “We will be ready to face any and all the eventualities.”

It is all a long way from the sweet-natured prosecco summit promised by Boris Johnson and other Brexiters, who insisted that the prevailing interests of Italian winemakers and German car exporters would quickly bring EU diplomats to heel.

Instead, Davis is digging in his heels for a long and bitter fight to the finish line. “There are points of tension in all negotiations, and there have been more than one,” admitted the Brexit secretary, calling on his critics to “focus on the end result, not the individual stages”.

Barnier prefers to describe his desire for sequencing as immutable and not subject to concession. “We have got to do things in the right order,” he replied. “If we mix everything up, there are risks.”

The reality is they are already talking about trade and money and sovereignty; just not agreeing very much. The cards are increasingly on the table. Britain can inflict pain on EU citizens and taxpayers; the EU can seriously damage the British economy.

Like nuclear deterrence, implementing such threats would bring heavy collateral damage for both sides, but the Europeans feel sure they know who would come off worse.

This article titled "Brexit talks: bad-tempered breakdown in sight as deadline looms" was written by Dan Roberts Brexit policy editor, for theguardian.com on Thursday 12 October 2017 01.31pm

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