Brexit talks inch forward

The clock is ticking in the Brexit negotiations, but the main issues remain unsettled, says Matthew Partridge.

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May looked "despondent" during the Council meeting in Brussels
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"It is a sign of how little has actually been achieved", says The Observer, that last week's European Council meeting in Brussels was "promptly hailed on both sides as progress". The big issues the divorce settlement, citizens' rights and Ireland's border remain unresolved and will be re-examined in September.

All we really got were some "positive comments about progress" from Council president Donald Tusk and Germany's chancellor Angela Merkel, who said she hoped the two parties would be ready to start discussing a trade deal in December. Still, on the plus side the mood music improved, with both sides apparently more willing "to find ways of helping each other move away from deadlock" following a rancorous few weeks.

Unfortunately, "it didn't take long" for the more "emollient" attitude displayed by the EU "to evaporate", says The Daily Telegraph. Immediately after the summit the PM was the target of a hostile briefing to the German press; she apparently "begged" the Europeans for help on Brexit and looked "despondent".

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What's more, senior figures within the European parliament have said that they "would oppose any plan that gave Britain the same benefits outside the EU as it had inside". This matters "because the MEPs have a veto on the eventual agreement". The upshot is that "even if it is not its policy, the government is right to make preparations for no deal".

Not so fast, says Wolfgang Munchau in the Financial Times. Germany's language has "softened notably" in recent weeks. This is not surprising, given Germany's trade surplus with the UK, and the fact that Merkel "is about to negotiate one of the most expensive coalition agreements in German history" means that "Germany clearly wants to avoid a breakdown in the Brexit talks". Still, it is undeniable that "if the UK restricts the movement of EU citizens into Britain, it is hard to see how a trade agreement can extend much beyond free tariffs on manufactured goods".

But the basic difficulty here, says Adam Boulton in The Sunday Times, is that even if Merkel and Brussels are willing to deal, they "don't know who will be on the UK side of the table, or whether they'll be inclined to accept it". The EU is dismayed by the extent of British disunity.

On the one hand, "extreme leave-means-leavers are salivating for no deal and a walkout. On the other side, Jeremy Corbyn's Labour Party has undergone a europhile makeover." Then there are the Remain Tories. The country's future relationship with the continent "lies in the hands of its own battling politicians".

Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri