* Summit showed EU trying to ease May's troubles
* December target to resolve deadlock on money
* Political will emerging to create leeway for deal
By Alastair Macdonald
BRUSSELS, Oct 22 (Reuters) - Diplomatic theatrics at last
week's Brussels summit revealed how European Union leaders will
coax Theresa May over the next two months into parting with tens
of billions of euros in return for a post-Brexit trade deal.
The British prime minister gave away nothing hardliners in
her Conservative cabinet can beat her with. She stuck to earlier
vague concessions about honouring commitments and insisting a
"Brexit bill", which the EU reckons at around 60 billion euros
($70 billion), must be part of a package deal on what Britain's
relationship with the EU will be once it leaves in March 2019.
Sticking to their own script, the other 27 states gave May
until the next regular summit in eight weeks to improve an offer
officials estimate at about 20 billion euros if she wants them
to start discussing future trade ties. Miss that deadline and,
the EU says, time will be running out for any deal.
Yet between the lines of well-rehearsed arguments that have
hit "deadlock" in the view of the EU negotiator, the outlines of
a political fix are emerging. It may create leeway to get round
an impasse that is in neither side's interest and which has left
businesses fearing the legal limbo of a messy divorce.
In essence, the 27 need to trust May that Britain will pay
much more than is on the table but understand her difficulties
in naming a figure by December, which could spark revolt at home
and derail the process. In return, they seem likely to let slip
more hints of what kind of future relationship she might secure.
The EU position is "solid", Italian Prime Minister Paolo
Gentiloni told reporters after the talks, but also "flexible".
It was unrealistic, he said, to expect May to sell a precise
demand for money in December. Equally, she could not expect the
EU to negotiate a future trade deal without knowing roughly what
outstanding items Britain would pay for. But defining those
items could, Gentiloni said, be done "in the most politically
manageable way possible for our British friends".
Even the roughest of definitions will let commentators work
out numbers. But as a senior diplomat from another major EU
power put it: "We don't want to go public with a bald figure. If
it's on the front page of The Sun, the whole process is dead."
"Reports of the deadlock ... have been exaggerated," summit
chair Donald Tusk concluded, adding that discussions with May
had finally succeeded in "establishing trust and goodwill".
Tusk, a former Polish premier, echoed the EU mantra of unity
among the 27 and full backing for European Commission negotiator
Michel Barnier, whose team of technical experts are handling the
talks with London. But he also acknowledged a nuance in his role
in steering the high-level political imperatives of the leaders.
That, Tusk said, meant he would be a "positive motivator" in
the coming weeks to create "a more positive narrative" than what
some British politicians call EU "blackmail" demands.
Anxious not to worsen May's troubles at home, fellow leaders
made an effort to demonstrate goodwill. German Chancellor Angela
Merkel and French President Emmanuel Macron take a hard line on
"sequencing" divorce talks before trade, but they huddled with
May in amicable conversation for television cameras.
The EU communique acknowledged progress on key issues, which
also comprise expatriate rights and the Irish border, and
instructed Barnier to begin internal EU preparations for the
talks May wants on a two-year transition period after Brexit.
Tusk said EU preparations would "take account of proposals
presented" by "our British friends" -- an indication that, even
without direct talks, May might be able to show her domestic
audience an outline of how the EU sees future ties.
Over dinner on Thursday, she appealed for help and stressed
two concessions made in a speech at Florence on Sept. 22 -- that
the 27 would not lose out financially in the current EU budget
ending in 2020 and that Britain would "honour its commitments".
Some were disappointed that she repeated Britain's rejection
of the legal basis of much of the EU's demands, notably that it
pay for EU commitments lasting beyond 2020. Macron, for one,
said they were "not even half way" toward an agreement on money.
But others detected a more positive tone. Luxembourg Prime
Minister Xavier Bettel said May had indicated that Britain was
at least "analysing" what other parts of the bill it might pay.
Merkel said she had "no doubt" a good agreement was possible.
Yet there are few illusions that the Brexit plot will play
out smoothly. "We've always predicted a drama for autumn," one
EU diplomat said. "We haven't seen it yet. So maybe November."
(Editing by Larry King)
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