The Brexit secretary, David Davis, will resume talks next week with the EU’s chief negotiator, Michel Barnier, but with the UK continuing to stonewall over the exit bill, Brussels has abandoned hope of an autumn breakthrough.

EU diplomats are grappling with how to deal with a weakened British prime minister who they believe has made compromises but has not gone far enough.



Both sides are counting down to an EU summit this month, where EU leaders could offer an olive branch to a “fragile” Theresa May by starting to discuss the future relationship with the UK among themselves. But they have abandoned the idea of moving to the next phase of Brexit talks.

Having watched the Tory party conference with grim fascination, senior EU negotiators want to send a positive signal to May, who has started to climb down from her hardline position.



The prime minister has agreed the UK will pay €20bn into the EU budget as the price of a transition deal, while British officials have quietly recognised that European law will have a “direct effect” in protecting the rights of EU citizens living in Britain.

In response to the more positive tone, the EU27 could agree to start discussing the future relationship and Brexit transition among themselves – an idea that could be agreed at the summit.



An EU discussion on trade – even without the UK – is intended to keep momentum in the talks, but falls way short of the detailed negotiations Davis has been angling for.



The British team has been stymied by the EU’s strict Brexit timetable, which requires “sufficient progress” on the divorce issues – citizens’ rights, the financial settlement and Ireland – before discussing trade.

The UK had hoped to get the green light from EU leaders to move on to trade at the summit on 19-20 October. But in Brussels it is almost a foregone conclusion that EU leaders will decide more time is needed to sort out the divorce. “Barring any major titanic incident, there is a general consensus there won’t be sufficient progress in October,” said one diplomat, echoing the view of several sources.

But even if the EU starts to discuss the future, Brussels believes the UK does not know what it wants. “The May cabinet needed a whole summer to get clarity on the transition. I think they will need three or four months of infighting to decide on the future [relationship],” a senior source said.



“The real drama for me is where [the British government] will be in six weeks’ time,” the source added – referring to May’s “fragile” position and the jostling to replace her at No 10.

Many in Brussels have pencilled in an EU leaders’ summit in mid-December as the date when the UK will clear the divorce hurdle. “[EU leaders] will say yes in December, probably, no matter what,” said another senior source. “We need an agreement as well.” The source discounted an agreement in November, saying Brexit was a low priority for the coming weeks: “[The leaders] have real work to do. [Brexit] is not real work, it is an accident they have to solve.”

Meanwhile, EU negotiators are confident the UK will next week make further concessions towards their position on citizens’ rights in contested areas, such as family reunification, but also on the red-button issue of the European court of justice (ECJ).



Senior Brussels players are encouraged by the signals they detect from the UK on citizens’ rights and are crossing their fingers for substantial progress. But they expect to be disappointed on the Brexit divorce bill and Ireland.

The prime minister’s tacit admission that the UK would pay into the EU budget two years after Brexit has improved the mood, but there is renewed impatience over when the British will spell out what else they will pay.

Davis has said the UK has “moral obligations” to the EU, but even senior British civil servants have been unclear what they are. France and Germany are upholding the EU’s strong line that the UK must sign up for a share of the EU’s unpaid bills and officials’ pensions, tripling the sum May has promised.

On Ireland, both sides are tiptoeing around the acute problem of whether the UK’s exit from the single market and customs union will lead to a hard border – either between north and south or a sea border. Both sides are worried that a hard border would reignite tensions in Northern Ireland; neither want to say there could be no alternative.



On the ECJ, outlines of a compromise are beginning to emerge: the British supreme court would not be obliged to refer contested cases on citizens’ rights to Luxembourg, but if they did, would have to accept an ECJ verdict.

If accepted by member states, this would also be a concession by the EU, which has said the ECJ should be the final arbiter on citizens’ rights.

Taken with the UK’s concession on “direct effect”, Brussels believes the UK is moving close to something that looks like the 1972 European Communities Act – the legislation that took Britain into Europe.

Other diplomats are withholding judgment until British officials sit down at the negotiating table next week.