EU signals to take tough stance in Brexit talks

The European Union (EU) has signalled it will take a tough stance in the upcoming Brexit negotiations with the UK.

Guidelines setting out the EU's formal negotiating position are expected to be agreed at a special summit of EU leaders in Brussels on Saturday.

Speaking ahead of the meeting, a senior EU source indicated that Brussels will "play hard ball" in the talks, reaffirming the bloc's insistence that the so-called "divorce bill" with the UK must be agreed before further Brexit-related discussions are held.

The source, speaking on Friday, also made it clear that the two EU agencies currently based in the UK must be relocated to another member state.

A "no-deal scenario" where the UK would formally exit the EU without reaching an agreement "would be in no-one's interest" but still cannot be ruled out, conceded the official.

He also said that in the upcoming talks between the EU and UK "flexibility and imagination" would be required to prevent the return of a hard customs border in Ireland.

The official expressed confidence that the EU and each of its remaining 27 members were "totally united" when it comes to their stance on Brexit.

This is likely to be reinforced at Saturday's summit which is expected to formally adopt the negotiating guidelines, details of which were sent to EU capitals a month ago.

The summit in Brussels was called solely to discuss Britain's departure from the bloc and will serve as a stage for the governments the UK is leaving behind to talk up unity and warn British officials against sowing division in the hope of securing a better exit deal.

Michel Barnier, the EU's chief Brexit negotiator, will join the other 27 heads of state at the talks at the weekend.

According to the senior EU official, details of the financial agreement on British withdrawal will have to be agreed before the discussions move to what he called "phase two" of the talks and the UK's future relationship with the EU27.

The source said, "This is one of the key elements. There can be no discussions on any future relationship without real progress on this aspect of the UK's withdrawal.

"In other words, we have to sort out the immediate consequences of Brexit before moving to discussions on the future relationship."

What he calls "general statements of goodwill" will be "insufficient" and it will be for the 27 to decide, not the UK, if "sufficient progress" has been made in the negotiations before moving to the "second phase."

The source said, "This is all about damage limitation and mitigating the negative consequences of Brexit both for British people and those in the rest of Europe."

The issue of residency rights for the estimated 3 million EU nationals currently residing in the UK and also the 2 million Britons who live and work on mainland Europe is likely to be a potential sticking point in the talks and the well-placed official said this must be a "priority" in the Brexit talks.

Britain could be required to give EU citizens permanent residency after living there for five years, in a challenge for May's Conservative government, which has vowed to limit immigration.

The source said, "This affects the lives of millions of people so, yes, this issue is a top priority."

At the start of the year UK PM Theresa May said that no deal with the EU would be better than a "bad deal" but the official said he believes the "tone" of the debate in the UK on this aspect had now "changed."

He said, "The fact that the tone has changed in the UK is to be welcomed."

On Tuesday, Austrian Chancellor Christian Kern said, "European unity will be tested. It's clear as daylight that the UK's strategy will be to try to divide Europe through bilateral negotiations with some countries."

But the EU source added that there was "broad agreement" on the EU's negotiating position which, he said, was "unique."

This had not changed by the decision to hold a general election in the UK on June 8.

The source also took a swipe at the UK over the length of time it took to trigger Article 50, which sets the Brexit process in motion, after the EU Referendum last year.

"It took the UK nine months to trigger Article 50 but the EU27 will have adopted its position within one month."

EU leaders hope that anti-EU forces in Netherlands and the rise of Emmanuel Macron in France will strengthen its negotiating hand as it seeks to preserve regional stability and ensure others aren't encouraged to follow the UK out of the door.

Mrs May indicated on Thursday that she knows what she is up against when she said the rest of the EU will "line up to oppose us."