Ending Brexit deadlock over financial contributions hinges on a transition deal

The Irish Times is trumpeting “ breakthrough” in the Brexit talks over guaranteeing to preserve free movement of all European Union citizens between Ireland and Britain. But the headline oversells the overall story which dwells on the absence of breakthrough.

.  In truth ” free movement  for EU citizens”  was bound to be the result for the future of the Common Travel Area  although the British have been making a meal of it and should have agreed it months ago, to start the Article 50 process on a more positive note.

The Irish are acutely aware of the disadvantages of being  hitched so tightly to the EU Commission wagon and are looking for any crumbs of comfort they can find.

In the big picture,opinion generally  is split down the middle between pro  and anti Brexiteers  over who  to blame for the lack of progress in the  negotiations, between those who claim  British tactics are based on “fantasy” and the British who have always regarded the  EU Commission as an unaccountable lumbering bureaucracy which is now sticking to an over-rigid agenda.

But it’s perhaps a  perversely good sign that negotiations are getting serious as a war of words is hotting up, with Michel  Barnier for the Commission declaring that the British stance was “ unrealistic and nostalgic  “ and  “sufficient progress” has not be made  for the heads of government to allow  negotiations to proceed to  trade matters when they meet in October.  While from Japan, the UK international trade secretary Liam Fox has declared that Britain will not submit to EU “ blackmail” over the  divorce bill.

All the same, it’s not difficult to detect a slight swing in favour of the British position:   for instance, how can the Irish border question be settled without talking about the substance of trade generally? What precisely is the big problem, when the British want a free trade relationship with the EU which would perpetuate many of the existing trade and standards presently observed by the UK as an EU member?  And how can the size of the divorce bill be decided until we know which EU programmes the UK will participate in after Brexit?

On the other hand the British do seem to want to have their cake and eat it. As one EU negotiator observes” the British position  papers  read as if they’re from someone wanting to join the EU not leave it”  while bureaucracies  home in  instinctively  on  complex jurisdictional questions like the role of the European Court of Justice.

British commentators like the Daily Telegraph’s Asa Bennett   are answering EU criticisms of the UK position papers by turning the tables against them

The EU has yet to publish a paper detailing its position on the Irish border question. Their side can at least claim to have put out something on the totemic issue of the so-called “Brexit bill”, even if it was just four pages of vague waffle and some tables showing off the vastness of Brussels’ bureaucracy.

All that should justify, apparently, the bloc’s demand for as much as – according to estimates – £100 billion.

The way through the present impasse hinges on a transition deal, according to  the excellent Charles Grant of the Centre for European Reform and repeated on Today programme this morning.

If the UK asked for a three-year transition and agreed to pay €10bn a year (roughly what it pays today), that would cover a large part of its share of unspent EU budgetary commitments. That would also ensure no hole in the EU budget in 2019 and 2020, the last two years of the current seven-year budget cycle – which would be a great relief to the European Commission. The other bones of contention – such as Britain’s share of the EU’s contingent liabilities and pensions commitments – could be handed to expert committees, while the talks moved on to the future relationship.

David Davis, the Brexit secretary, and Philip Hammond, the chancellor, back the principles of such a deal. So do some of the EU’s most senior negotiators and the French government. But there are difficulties with the sequencing. The UK cannot make a generous offer on money – which will be controversial at home, even if sold as “buying access to the single market” – without being sure the EU will immediately respond with talks on a free trade agreement and a transition. But the EU will not consider that until it sees a solid offer from Davis.

The sequencing can be fixed with a bit of creativity and goodwill from each side.

However there are different ideas of the length and nature of  transition ranging from two years, to forever. That one can wait. For now it’s progress – any progress – that matters.

Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London