All the brave talk before and after the referendum seems to have disappeared. Europe, we were told, would be desperate to sign a trade deal with us. German car companies would knock down Angela Merkel's door and force her to the negotiating table. Well, that has all evaporated this afternoon when Davis and Barnier held a press conference in Brussels at the close of the fifth round of talks.
We are nearly seven months on and have still not reached agreement on the separation issues. The talks are "deadlocked" according to Barnier (HERE) over the settling of the accounts and there is no real progress on the Irish border question. And far from Germany coming to our rescue, they are reported to be the hardliners over the money issue. Barnier's closing comments are HERE and Davis' HERE.
The EU side seem perfectly relaxed and happy to see the clock run down while in the UK politicians and the press are boiling with frustration that trade talks have not yet started. I assume there will be an increase in the calls for us to walk away and leave without a deal. If the government looks like agreeing to this the markets will pronounce on the UK economy and sterling will come under pressure. The pound sank today immediately after the press conference but recovered about half of the 0.5% loss in the afternoon.
The government is deaf to banks and businesses who constantly plead for clarity about future trading conditions or a legally watertight transition period. If they don't get certainty very soon many will relocate to continental Europe.
Davis pointedly appealed to the European Council, the leaders of the other 27 member states, to widen Barnier's mandate so that trade talks can start quickly but nobody expects that now before Christmas. We will then have about nine months to negotiate the most complicated trade deal ever attempted. What are the odds of success? The Independent had a great editorial about it all HERE.
According to this article in the same newspaper (HERE) the European Council President Donald Tusk has drafted up a response ready for the summit next week. It will apparently say there has been insufficient progress and this will create a big problem for Mrs May. The EU is refusing to move on to trade talks without more concessions and the Brexiteers in her party won't allow her to give any.
We really are at an impasse. Business is surely beginning to get nervous. She cannot be unaware of the pressure from industry and the banks. Who is going to blink first?
There is perhaps a spark of hope in the right wing press that the EU is opening the way to trade negotiations by the draft announcement by Tusk (HERE). He is proposing the EU 27 discuss future trade among themselves and authorise Barnier to begin preparations for developing their position. Some describe this as an olive branch (HERE) but it's really dangling a carrot (to keep the plant metaphors) before the UK as a means of encouraging us to move on the three separation issues, to get us over the line and make serious commitments on money and serious proposals on the Irish border.
This EU is not going to be flexible on the sequencing because it can't and it doesn't need to.
This is a very high stakes game and I am not convinced Mrs May is the right person for it. Either she must face down the Brexiteers and the tabloid press, something she has been unable to do up to now, destroying the Conservative party in the process. Or throw the economy under a bus and with it the Conservative party's electoral chances for years and years. Is Hammond going to win the cabinet battle or will Fox, Davis and Johnson prevail?
I note some commentators are drawing parallels with Tory claims that Corbyn will turn this country into Venezuela with their own threat to exit the EU without a deal. Many believe the Tories will actually visit upon us a greater catastrophe than Hugo Chavez has on Venezuela!
Finally, there may be a glimmer of hope for remainers in all of this. John Rentoul at The Independent thinks if a no deal option ever gets to parliament MPs will decide that remaining in is our best option (HERE).
