The EU's Michel Barnier cited differences on citizens' rights, the bill to be paid by the UK and the issue of the Irish border. Barnier said he could hear the clock ticking towards the exit date of March 2019.
In parliament, British Foreign Secretary Boris Johnson said the EU could "go whistle" if it tried to impose an "extortionate" exit bill on the UK as it left the bloc. Some estimates put the figure of monies owed by the UK at 100 billion euros ($112 billion).
Johnson's words were repeated three times in journalists' questions at Michel Barnier's press conference in Brussels on Wednesday as he gave a report on the state of play of Article 50 negotiations.
Barnier said: "I am not hearing any whistling, just the clock ticking" towards the March 2019 date for Britain to become a third-party state.
The EU negotiator urged Britain to send over its negotiating position on key issues ahead of the second round of formal Brexit talks with his British counterpart David Davis. They are due to start on Monday in Brussels.
Three points for the divorce
Barnier said there were three important points which needed to be resolved before the two sides could look at a future relationship.
"These three priority subjects for the first phase of negotiations are inseparable. In other words, progress on one or two of these topics will not be sufficient to move on to discussions about our future relationship with the United Kingdom," Barnier said.
The first priority Barnier said was the right of EU citizens in the UK, and the rights of UK citizens in Europe after Brexit. The second was the UK's financial obligations to the bloc ahead of its departure and the third the situation of Northern Ireland.
Rights of EU citizens
"We want EU citizens in Britain to have the same rights as British citizens who live in the EU," Barnier said, adding that the current British position did not guarantee these equal rights.
"As things stand, the British position does not enable those persons concerned to live their lives as they do today," he said, adding: "For example, we want European citizens in the United Kingdom to have the same rights as British citizens who are living in Spain or any other country of the European Union. The British position as it now stands does not allow for that reciprocity."
Barnier said that the European Court of Justice should be the "ultimate guarantor" of these rights. Britain wants to regulate citizens' rights under British law - the issue was a pet peeve of Theresa May's for years during her time as interior minister - but Barnier said if Britain opposed this "it would create uncertainty."
On monies owed by Britain to the EU Barnier said: "On the single financial settlement, it is essential that the UK recognize the existence of financial obligations which are simply a result of the period in which they were members of the EU," he said. Only then would negotiations begin on the "methodology" of how that bill would be worked out.
Barnier said the financial settlement was a key element for there to be trust and confidence between the EU and the UK. "How do you build a relationship, a relationship based on trade, on security and defense and on other subjects, like universities, how do you build a durable and long-term relationship, with a country if there is no trust? How would you do that?" he asked.
Barnier said he had met with leaders from Northern Ireland this week with a view to discussing the issue of the border with the Irish Republic. Farmers on either side of what will become a new UK-EU land border on the island fear disruption after March 2019. Barnier said the issue could undermine the fragile peace in the British province.
No talks about the future
The EU negotiator ruled out any discussion on Britain's future trade relationship until the three key points were resolved.
Asked what would be the best solution, Barnier said the situation between the EU and the UK was "unique" and he wanted to keep it that way. A best solution would be for the UK to remain an EU member, he said, and after that a member of the European Economic Area, such as the arrangement that Norway has with the bloc.
"The decision to leave the EU has consequences. And we have to explain to citizens, businesses and civil society on both sides of the Channel what these consequences mean for them," Barnier said.
After Boris Johnson had made his "whistle" remarks on Tuesday, Brexit minister David Davis said before a parliamentary committee that the "major elements" of Britain's Brexit strategy had not changed, although the "parliamentary arithmetic will dictate a certain sensitivity," saying that Britain's objective was "not to pay more than we need to."
On Thursday the UK government publishes its Repeal Bill, a draft law with two main aims: repealing the 1972 European Communities Act that formalized UK membership, plus the wholesale import of thousands of EU laws directly into British law.
Barnier said he would shortly send written details on major issues concerning the divorce terms. "I will be sending seven papers to the United Kingdom no later than tomorrow," Barnier said.
jm/msh (Reuters, AFP)