20/07/2017 14:31 BST

EU Warns Of 'Fundamental' Differences With UK Over Rights Of Its Citizens After Brexit

Michel Barnier says issue of financial settlement must be dealt with.

Anadolu Agency via Getty Images

Michel Barnier, the EU’s chief Brexit negotiator, has warned “fundamental” differences remain between Brussels and the UK over the future status of EU citizens.

In a press conference alongside Brexit secretary David Davis this morning, Barnier also said the issue of how much money the UK owed the EU “must be settled”.

The EU wants its citizens who remain in the UK after Brexit to have their rights overseen by the European Court of Justice.

But Theresa May has ruled this out.

Davis admitted this week’s talks had been “robust” but also “constructive” as he struck a more upbeat tone than Barnier.

And he said there needed to be “flexibility from both sides” of the negotiating table when it came to how much money the UK paid the EU as if walked out the door.

The issue of how EU citizens will be treated in the UK after Brexit appears to have become a major sticking point in the talks.

Barnier said: “There does remain one fundamental divergence on the way in which such rights would be guaranteed and on several other points, for example, the rights of future family members or the exports of certain social benefits.”

And he he said the EU needed “clarification” from the UK on whether it would honour its previously agreed financial commitments.

“What we want - and we are working on this - is an orderly withdrawal for the United Kingdom, that’s decided. An orderly withdrawal means accounts must be settled,” he said.

“We know that agreement will not be achieved through incremental steps. As soon as the UK is ready to clarify the nature of its commitments, we will be prepared to discuss this with the British negotiators.”

Davis added: “On financial settlement we both recognise the importance of sorting out the obligations we have to one another, both legally and in a spirit of mutual cooperation.”

This morning, Liam Fox has said the UK could “survive” without a new free trade deal with the EU after Brexit.

The international trade secretary claimed a deal with Brussels would be “one of the easiest in human history” to achieve, but suggested he did not believe it to be vital.

By contrast, Chancellor Philip Hammond has said failing the secure a deal would be “a very, very bad outcome”.