MNI: Davis Says Financial Settlement Will Probably Favour EU

--Says Settlement Political Not Legal; Blames EU For Holding Up Talks

By Kieran Williams and Jean Comte

     LONDON (MNI) - Talks on a future deal will hopefully be completed by

October 2018 said Secretary of State for Exiting the EU David Davis at a Lords

European Union Select Committee. 

Davis adduced that this is what he believes is the preferable timetable for the

EU as this would mean that European Parliament could vote on the deal in

December or January, whereas the UK could vote sooner on the deal. Cautious not

to sound too optimistic though Davis said "if we hit October though, no one

would be happier than me."

     After comments from Davis at the Treasury Select Committee last week that a

vote in parliament could come after the UK had left the EU, Davis was careful

not to be led into hypothetical scenarios. 

     Davis said that the withdrawal agreement would probably be more beneficial

to the EU, while the future trade deal would be important to both sides.

     "The withdrawal agreement, on balance, will probably favour the union in

terms of things like money and so on. Whereas the future relationship will

favour both sides and will important to both of us."

     The Committee likened the financial settlement to a negotiating chip, a

dial that the UK could turn up and down to affect the outcome, but Davis

rejected this metaphor. Earlier in his testimony, however, Davis expressed a

similar sentiment when he said that UK viewed the financial settlement as a

political obligation as opposed to a legal obligation.

     The deal covering withdrawal could initially be a "political agreement"

said Davis, but noted this was more down to the stance of the EU.

     "Whether [Barnier] believes [the agreement] will be as precise as we

believe it will be, I don't know at this stage. He has used words like 'scoping'

and 'framework', rather than agreement. I take the view it's got to be an

agreement. It may be a political agreement at that stage because, as the

committee is aware, the European Union can't sign the next stage agreement with

us until we are a third country."

     Davis was asked about the story earlier on Tuesday that the government

would allow the withdrawal bill to be enshrined in law and thus scrutinised by

parliament rather than the "take it or leave it" vote originally planned.

     Davis said that the government will listen carefully to the debate on the

bill, and will use the input to accept amendments to the bill, but would not be

drawn on what amendments would be accepted.

     Talks are set to resume at the end of next week according to Davis who said

he had just come off the phone with EU Chief Negotiator Michel Barnier. The UK

had tried to organize talks earlier according to Davis, but the EU team had

prior engagements.

     "We want to get on with the process, we are not holding up the process," he

told the committee.

     Earlier today, the EU appeared eager to blame the UK for the fact that no

negotiation round was planned. One official said that the EU proposed a

tentative schedule - one week in October, one in November, and one in December -

but didn't get any answer from the UK side.

     The official suggested that the UK was not willing to move forward on the

talks, as London will have to enter in the details of the budgetary

negotiations, and thus to make some hard proposals regarding the "Brexit bill".

     In the meantime, the Council of the EU - the EU institution that brings

member States together - is moving forward. One official told MNI that the

Brexit team began to work on the "consolidation" of the progress made in the

previous round. The idea, MNI understands, is to consolidate this progress

through a written language, that can possibly be used to draft the final

agreement at a later stage of the talk.

     As agreed at the last European Council, diplomats from the 27 member States

also began to prepare the second phase of negotiations - the one which is

supposed to come after sufficient progress are achieved on Brexit bill, citizens

rights and Northern Ireland. But the talk are at a very "exploratory" stage,

stressed one official. "It is not about setting the EU position, but mostly

about identifying the main elements that will be part of this discussion", the

source told MNI.

--MNI London Bureau; +44 203 865 3809; email: kieran.williams@marketnews.com