Barnier says 'no decisive progress' on key Brexit issues after latest talks

There had been "no decisive progress" on the key issues between the UK and European Union over Brexit in the latest round of talks, said chief EU negotiators Michel Barnier.

Speaking after meeting the UK's Brexit minister David Davis, Barnier said said he was "quite far" from being able to recommend EU leaders start the second phase of talks when they meet in October, adding that there still did not seem to be mutual trust between the two sides.

“We have made genuine progress on the common travel area and have also been able to clarify work that needs to be done in a constructive spirit, in particular north-south cooperation in the Good Friday Agreement,” Barnier told a news conference on Thursday at the conclusion of the talks.

However, both sides were still at loggerheads over the size of the UK's financial settlement, otherwise known as "the divorce bill". The UK has said it won't make any payments to the EU budget after it departs the bloc in March 2019.

“It is clear the UK does not feel legally obliged to honour these obligations after departure,” Barnier told reporters.

“How can we build trust and start discussing the future relationship? We have to address these things together seriously,” he said.

"At the current state of progress we are quite far from being able to say that sufficient progress has taken place, sufficient for me to be able to recommend to the European Council that it engage in discussions on the future relationship between the UK and EU at the same time as we would, during the course of 2018, go on working on finalising the exit and withdrawal agreement."

Davis said the UK government had an obligation to "interrogate" the EU over its calculations.

"We won’t be making incremental progress on this in every round. There are still significant differences to be bridged," he said.

"At this round we presented our legal analysis.... It’s fair to say across the piece we have a very different legal stance," he added.

Barnier accused the UK of "nostalgia" over the series of position papers it had so far published on the customs union, rights of EU citizens in Britain and the Irish border.

He said the document outlining a planned relationship with the EU single market and customs union were "simply impossible".

“The UK wants to take back control, wants to adopt its own standards and regulations – but it also wants to have these standards recognised automatically in the EU. That is what UK papers ask for. This is simply impossible. You cannot be outside the single market and shape its legal order.”

"The single market's capacity to regulate, to supervise, to enforce our laws must not and will not be undermined by Brexit."