'Significant' differences remain over Brexit deal, warns EU negotiator

The EU's chief Brexit negotiator has repeated his warning that the transition period sought by Theresa May is not yet in the bag, stressing that "significant points of disagreement" remain.

And Michel Barnier said he was "concerned" that only a short time remains to iron out these differences ahead of the October deadline for finalising a legally-binding withdrawal agreement.

He backed European Council President Donald Tusk's dismissal as "pure illusion" of the proposals for a long-term UK-EU relationship thrashed out by Mrs May at Chequers last week.

"The clock is ticking," he said. "Time is short. I am concerned because of the shortage of time between now and the autumn ... when we are going to have to conclude an agreement with the UK."

Mr Barnier was speaking a day ahead of the publication of the European Commission's draft text for the withdrawal deal, which will incorporate proposals for a transition period lasting from the formal date of Brexit in March 2019 to the end of 2020.

He said there would be "no surprises" in the 120-page document, which will set out in legal terms the political agreements reached between Mrs May and Commission president Jean-Claude Juncker in December.

This will include procedures for putting into operation the "alignment" of Northern Irish regulations with the EU rulebook, which will be needed if no technological solution is found to keep the border with the Republic open after Brexit.

Mr Barnier warned that it will not be possible for the UK to obtain an open-ended transition period, during which Britain would follow EU rules but play no part in deciding them.

And he said that Brussels would not accept any regulatory divergence, obstacles to free movement or dilution of the rights of EU citizens who come to the UK during the transition.

Speaking at a Brussels press conference, Mr Barnier said: "There are significant points of disagreement with the UK as to what we understand by transition, the conditions for such and the dimensions for such a transition."

He warned: "In the light of these disagreements, we have not achieved the transition yet.

"On all of these points of disagreement, I am happy to discuss these matters straight away with (Brexit Secretary) David Davis. It's essential we make progress by means of political discussion, political negotiation."

It was "obvious" that the UK would have to comply with all EU rules, including the single market and customs union, during transition, he said, adding: "As far as we are concerned, we can't accept the risk of regulatory divergence during the transition period."

Mrs May has made clear she will fight Brussels' proposals for EU nationals arriving during the transition to be granted permanent rights to remain, insisting that it is right to treat them differently from those coming to the UK before March 2019.

But Mr Barnier said: "During the transition, clearly, the free movement of persons must be maintained, which means that citizens who arrive before and during the transition period should be treated equitably and in the same manner."

There were also disagreements over opt-ins for justice and home affairs issues and the right for the UK to be consulted on changes to EU law, said Mr Barnier.

On Mrs May's proposal for a future EU-UK relationship based on "ambitious managed divergence" - in which Britain would observe EU regulations in some areas and go its own way in others - Mr Barnier said: "It is illusory to imagine a situation in which we would accept cherry-picking.

"We are responsible for guaranteeing the integrity of the single market. The UK knows what the rules are which underpin that integrity, because they have been helping us put them together for the last 40 years."

The draft withdrawal agreement text will be discussed with the remaining 27 EU member states, as well as the European Parliament, before being adopted at the European Council summit in March.