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Brexit talks round 2: what to expect

The clock is ticking toward Britain leaving the European Union. How much progress has been made and what lies ahead? As negotiations get going in earnest, DW explains the major issues and obstacles surrounding Brexit.

Where do we stand right now?

The second round of talks will cover the substance of the divorce negotiations. Although there was an initial round of talks in June, they were mostly about scheduling. The two sides agreed to meet once a month until October 2017, using the periods between the meetings to develop ideas and proposals that, in the best-case scenario, will drive the talks forward.

Britain and the EU also agreed that the main details of how Britain will leave the EU must be hammered out before any discussions about what its future relationship with the bloc looks like. This was nearly unanimously regarded as a first defeat for Britain's chief negotiator David Davis, who would have liked to have negotiated the exit and a new deal with regard to the European common market simultaneously.

That was pretty much all that was accomplished in June. "Now the hard work begins," said EU chief negotiator Michel Barnier ahead of the second round of talks beginning on July 17.

Person draped in an EU flag in London

EU citizens in Britain want to know what the future holds in store

What issue are they likely to start with?

The one on which there is perhaps the best chance to reach a fairly quick agreement: the status of EU citizens living in Britain and British citizens living in the EU. Both sides have an interest in ensuring the future of these two groups. There are around 3 million EU citizens who lived in the UK, and 1.5 million UK citizens residing in the EU.

But even on this score, there is no guarantee that the two sides can reach a deal. At the first round of talks, Britain said it would be willing to let people who had already lived in Britain for five years stay, and that  EU citizens permanently resident in the UK for a shorter period of time could also remain. But both groups would have to apply for residence permission and no cut-off point was specified after which different rules would apply.

The EU's response to this informal offer was tepid. Barnier criticized the proposal as vague and insufficient. Most European leaders want to see far better guarantees for their citizens in the UK. And they want the European Court of Justice to be the arbiter in contested cases - that's anathema to Brexiters.

What is likely to be the toughest issue?

One of the thorniest issues is likely to be money - or what's sometimes called the "divorce bill" the EU will present to Britain. That will cover the commitments the UK has already made within the EU and its share of EU liabilities, minus its proportional share of EU assets. Estimates of the potential end sum cover a wide spectrum but most are relatively consistent. The Center for European Reform projects a figure from 25 to 73 billion euros  ($29-84 billion). The Brussels think tank Bruegel put the range at 25-65 billion euros and the Financial Time newspaper at 55-75 billion.

A Euro

The EU is going to want to see a lot of these before it lets Britain leave

Any agreement is going to be massively, perhaps maddeningly, detailed. For instance, according to Germany's Die Zeit newspaper, the EU could ask the UK to pay over half a billion euros in costs associated with relocating the European Medicines Agency, which approves pharmaceuticals for the bloc, from London to some other EU city. And that's just one example of the enormous complexity of this issue.

Britain, of course, would prefer not to pay anything at all, and British Foreign Minister Boris Johnson famously said the EU could "go whistle" on the issue. But statements from the British government ahead of July 17, show that London has accepted that a bill from Brussels will be on its way at some point.

What about Northern Ireland?

Indeed, what about it? That's another issue that urgently needs clarity. Neither the UK nor the EU, which includes member state the Republic of Ireland, want to see a re-erection of the fortified borders that once divided the island and caused so many decades of bloody conflict. Both sides have pledged to hammer out a mutually acceptable solution, but there have been no details so far.

The matter has been complicated by the fact that, after losing her parliamentary majority in a snap election last month, British Prime Minister Theresa May has had to form a coalition with the DUP, a small party from Northern Ireland. It remains to be seen how the DUP will affect the UK's negotiations.

How do the two sides feel about one another right now?

David Davis (left) and Michel Barnier

David Davis (left) and Michel Barnier have some busy months ahead of them

The atmosphere ahead of July 17 is tense, and could be about to get worse. The Europeans are irritated by what they see as Britain's lack of preparation and clarity as to what precisely they want - a situation that wasn't helped by May's election debacle in June. Leading experts on the negotiations say Britain's position is weak, and former British cabinet member Gus O'Donnell complained to the British newspaper, The Observer, that the UK was still negotiating with itself instead of with the Europeans. EU leaders have spoken of "confusion," "lack of leadership" and a British government that is "not in full control."

Conversely, key British figures like London Brexit envoy Jeremy Browne, accuse France in particular of trying to undermine the British capital as a financial center. In an internal memo, leaked to a British tabloid on the eve of the talks' resumption, Browne called a meeting with the French Central Bank in early July "the worst I have had anywhere in the EU." He said that the French were in favor of "the hardest Brexit" and wanted "disruption."

Given that, can the talks stay on schedule?

The timetable for the Brexit negotiations

The timetable for the Brexit negotiations is extremely tight

According to a timetable put forward by Barnier, the aim is to conclude negotiations for the withdrawal deal by the end of this year. That would leave eight months, until October 2018, to work out a framework for a new EU-UK relationship, and roughly five months to have the withdrawal agreement ratified by Britain and the bloc before the final Brexit deadline on March 29, 2019.

Almost all experts think that's unlikely to happen, which gives rise to a number of scenarios. If no deal can be approved by the deadline, and nothing else is arranged, Britain will crash out of the EU, causing immense economic damage to both sides. That would be the hardest of all Brexits.

But article 50 of the Lisbon Treaty, which Britain invoked to initiate the exit proceedings, is open to interpretation. The timeframe for negotiations could be extended, if all 28 member states approve. And there is nothing in the Lisbon Treaty that precludes article 50 from being reversed if Britain changes its mind. But again, all the other 27 EU members would have to agree to that.

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