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Report: May fears Brexit talks may collapse unless EU OKs moving on to trade

British Prime Minister Theresa May fears a collapse of Brexit negotiations without a clear hint at a key summit this week that talks could move on to trade and transition by December, Bloomberg News reported Oct. 16, citing "a person familiar with her team's views."

Senior British ministers are said to be losing faith in the bloc's willingness to reach a deal. May took a political risk by promising payment into the EU budget in her speech in Italy, but is now looking for clues from the bloc before taking any further steps, the person familiar with U.K. position told Bloomberg.

The two sides originally wanted the Oct. 19 European Council summit to mark the moment when the talks could move on to trade, but an Oct. 16 draft of the summit conclusions outlined additional hurdles for the U.K. to clear before talks about a new trade accord could begin. The EU's demand for a guaranteed role for the European Court of Justice is set to be part of the summit conclusions.

The two key obstacles to letting talks proceed to the next phase are said to be German Chancellor Angela Merkel and French President Emmanuel Macron. Germany has a vested interest in delayed Brexit talks, with Frankfurt trying to poach companies from London.

The Brexit department rejected suggestions that the negotiations were not going in the right direction, saying: "We are making real and tangible progress."

Meanwhile, Germany favors a broad post-Brexit partnership between U.K. and the EU, calling for a "comprehensive free-trade accord" covering several fields, according to a separate Bloomberg report, which cited an Oct. 11 draft paper prepared by the foreign ministry in Berlin.

However, the draft paper noted that the U.K.'s degree of access to the single market should be conditional on the extent of regulatory compliance by the U.K.

Germany will stick to the condition of "adequate progress" on first-phase Brexit issues for the talks to move on to the new relationship, Merkel's spokesman, Steffen Seibert, told reporters Oct. 13.