Michel Barnier, the European Union’s chief Brexit negotiator, warned of “serious divergences” with the UK after the two sides ended their first week of negotiations over their future relationship.
And he rebuffed a request from the British government to wrap up an early deal on access to the single market for London’s banks.
Speaking to reporters in Brussels yesterday, Barnier said the two sides are at loggerheads on four key issues: competition policy, where the EU wants the UK to commit to a so-called level playing field to prevent its economy being undercut; criminal justice and law enforcement, where the UK says it wants to withdraw from the European Court of Justice and the European Convention on Human Rights, something the EU opposes; fishing, where the EU wants continued access to British waters; the way any deal would be structured.
Britain favors a series of mini-agreements in case some issues become impossible to resolve, while the EU insists there must be one all-encompassing deal.
“There are many serious divergences,” Barnier said. But “an agreement is possible -- even if difficult,” he added.
As the talks began earlier this week, officials were privately downbeat on the chances of an agreement, while British Prime Minister Boris Johnson has threatened to walk away if no deal is in sight by June. But on Thursday, both sides described the first round of talks as “constructive.”
“The mood music was better than expected,” EU Trade Commissioner Phil Hogan told reporters in Dublin on Thursday. “Once the initial skirmishing is out of the way, hopefully we can make a lot of progress between now and the end of June.”
Brussels has made any trade deal conditional on the two sides reaching an accord on fish.