Much talk, few compromises in first Brexit negotiations

By Alastair Macdonald and Francesco Guarascio

BRUSSELS (Reuters) - British and EU chief negotiators laid out their opening positions in a first full round of Brexit talks that confirmed some common ground on how Britain will leave the European Union, but little compromise on key disputes.

David Davis and Michel Barnier said on Thursday that four "constructive" days of "robust" talks between their respective teams in Brussels had helped "build trust" and explain many of the details of their competing visions for a divorce deal.

But they also confirmed "fundamental divergence" on how to protect the rights of expatriate citizens stranded by Britain's walkout and a stalemate on settling London's EU accounts. Barnier complained the British had yet to give their arguments for disputing a bill Brussels puts at tens of billions of euros.

With talks finally under way 13 months after Britons voted to leave due to concerns about immigration and sovereignty, Davis echoed Barnier's impatient catchphrase "the clock is ticking". The Brexit secretary said British officials would work "at pace" for a deal to avoid a disorderly exit in March 2019.

But Barnier, the former French cabinet minister who is chief negotiator for the European Commission, said London must start explaining how it sees a financial settlement with Brussels or there would be no opening of discussions which Britain hopes for by the end of the year on a future, post-Brexit free trade deal.

British officials question the EU's argumentation but said it was far from clear they would produce a counter-proposal in detail in the coming weeks on how much they are willing to pay.

Davis was asked whether Britain would now agree with the EU that, whatever the final "Brexit bill" would be, it would mean a net payment from London to Brussels and not vice versa, as some British ministers have suggested. He refused to answer, however, referring only to a government statement last week that Britain would settle rights and obligations to the EU after Brexit.

Barnier acknowledged that as positive and British officials say it was meant to remove a bone of contention this week. Prime Minister Theresa May, weakened by an election upset last month, seems unwilling to risk a public backlash by accepting it will definitely pay Brussels, but negotiators now take it as read.

The EU side has stressed it is not aiming to put forward a figure soon - the Commission has offered a ballpark number of 60 billion euros ($70 billion) that Britain ridicules - but wants to agree a "methodology" on how it will be calculated, ideally by October.

CITIZENS' RIGHTS

On citizens rights, negotiators on both sides told reporters that British rejection of the EU insistence on the rights of 3 million Europeans in Britain being guaranteed by recourse to the European Court of Justice (ECJ) remains a major sticking point, though there are several other differences on what rights they can get.

"We are now moving in the same direction," Barnier said of the citizens' rights dimension. "But there is a fundamental divergence on how to guarantee those rights."

A chart drawn up by negotiators broke down 44 topics raised in the two sides' offers on expats. Of these, exactly half, 22, were marked green for agreement, and 14 were red.

As well as rejecting ECJ oversight - seen in London as "judicial imperialism" - Britain wants to limit rights granted to future children or spouses and to subject those it will give permanent residency to criminal records checks, both areas where the EU either disagrees or at least has some concerns.

Britain demands that its million or more citizens living on the continent be entitled not just to stay in the country they are in but move residence freely around the bloc. However, this is resisted by the EU, which notes that Britain wants to strip residency rights from their citizens if they spend two years living in the EU.

There are also differences on mutual recognition of social security and welfare payments.

IRISH QUESTION

Davis and Barnier said discussions on efforts to limit the impact on peace in Northern Ireland from a new UK-EU border with the Irish Republic showed a common will. The EU asked Britain to provide more detail on how it foresaw its pre-EU Common Travel Area with Ireland continuing to operate after Brexit.

Noting the week had delivered progress on settling a range of other loose ends, such as Britain's withdrawal from the Euratom nuclear monitoring body and how to deal with ongoing EU court cases involving Britain, Davis said: "All in all, the ... negotiations have given us a lot to be positive about."

Barnier stressed he was still expecting "clarification" from London on many issues at the next round of talks in late August.

He must now report back to the other 27 EU governments, whom he must keep on board through the complex negotiations.

($1 = 0.8599 euros)

(Additional reporting by Robert-Jan Bartunek, Elizabeth Miles and Philip Blenkinsop; Writing by Alastair Macdonald; editing by David Stamp)