EU approves strategy for Brexit talks, says negotiator Michel Barnier

The EU has finalised its tough Brexit negotiating position, reiterating its hard line on the UK’s departure bill and refusing to discuss a future trading arrangement until there is agreement on other key topics.

“We want to move to a situation where all the commitments taken by the UK will be honoured, as will ours with the UK,” said Michel Barnier, the EU’s chief Brexit negotiator, after a meeting of the remaining 27 national governments.

“We need to settle the accounts, and that’s a question of trust between us to build our future relationship.”

He was speaking a day after UK Brexit secretary David Davis was quoted as saying Britain would walk away from talks unless the bloc drops its high financial demands. The size of Britain’s exit bill, estimated at €100bn, will prove an early test of the ability of both sides to find common ground when negotiations start.

“All 27 of us today have confirmed the position we’re going to defend,” Mr Barnier said. “I do understand the UK has different positions, but as we’ve said, a negotiation is a negotiation.”

The two sides have until March 29, 2019, to find common ground on the separation. At that point, Britain will leave the EU regardless of whether it has a deal or not. The development came as a survey showed the amount of international investors planning to reduce their UK asset portfolios has grown in the last couple of months, with nearly 20% now intending to row back just as Brexit negotiations are set to start in earnest. The latest quarterly ‘Brexometer’ index from financial services firm State Street shows 19% of institutional investors now plan to reduce their UK asset holdings over the next six months. This figure is up from 16% in the first quarter of this year.

“The long-awaited post-Brexit vote slowdown is showing tentative signs of appearing in the data, but long-term investors remain optimistic. The beginning of Brexit would appear to have done little to dent the confidence of long-term investors in the UK. The question now is whether that will last as actual Brexit takes shape during the negotiation process,” said State Street’s Michael Metcalfe.

Additional reporting Bloomberg