Still no Brexit breakthrough as negotiations falter over state aid, finance and fish

There was no Brexit breakthrough as the seventh round of negotiations talks came to a conclusion today. Both sides remain bitterly divided over state aid and common fisheries, with the EU refusing to conduct parallel talks on other matters unless solutions are found to these most intractable issues first. Michel Barnier, the EU’s chief negotiator, now believes that a deal between the UK and the EU is unlikely.

Speaking at a press conference this morning, Barnier said: “Those who were hoping for negotiations to move swiftly this week will be disappointed… I frankly am disappointed, concerned, and surprised as the British minister told us in June that he wanted to speed up the process during the summer,” adding: “On the European side, we are very concerned about the state of play in our negotiations. The clock is ticking.”

British negotiations had indeed hoped to speed up talks this week, with the intention of securing a deal by mid-September; they are keenly aware of the fact that coronavirus will complicate the ratification process if talks drag on to the last minute. The final scheduled negotiating week, beginning on 2 October, is considered to be the de facto deadline among the negotiators.

But David Frost, the UK’s chief negotiator who usually presents as an ardent optimist, seemed more downbeat than ever today. “We have had useful discussions this week but there has been little progress,” he said in a statement. “The EU is still insisting not only that we must accept continuity with EU state aid and fisheries policy, but also that this must be agreed before any further substantive work can be done in any other area of the negotiation, including the legal texts.”

Brussels’ refusal to conduct parallel talks so late in the game has irked British negotiators, who this week tabled a draft free trade agreement – a consolidated legal text – in a bid to trigger a sudden turnaround. It is believed that the draft highlights the significant number of areas on which there is agreement, with the UK side hoping it provides a basis on which imaginative, holistic solutions can be found to the remaining sticking points.

The document, which was submitted to Barnier on Tuesday, is currently a confidential text and has only been seen by the European Commission. David Frost has requested that it not be sent to the 27 national governments without London’s explicit permission – perhaps to avoid politically-damaging leaks emerging in the press.

This suggests there could be some major concessions in the text. Ministers have grown increasingly worried about the extra financial burden a no-deal would place on the Covid-struck UK economy, which already suffered the worst GDP drop of any European country in the last quarter. This, as well as the resurgence of support for independence in Remain-voting Scotland, has increased Downing Street’s appetite for a deal.

The road ahead is paved with uncertainty, however. Beyond fisheries and state aid, differences also remain over access to financial markets, migration, security, dispute-settling mechanisms, and human rights guarantees.

When talks resume in London on 7 September, Frost and Barnier will have less than a month to resolve them.