By Jan Strupczewski and Alastair Macdonald
BRUSSELS (Reuters) - The European Union told Britain on Friday to spell out what it will pay Brussels for when it leaves the bloc in 2019 or face more delay in talks on future trade ties that are vital for British business.
After negotiations in Brussels, the first in a month, Brexit Secretary David Davis said during a news conference with his EU counterpart Michel Barnier it was time for "political discussions" to break a deadlock that has left both sides frustrated about a lack of progress.
"Political" talks has in the past been code for Prime Minister Theresa May addressing fellow EU leaders directly, over the heads of Barnier and the EU executive, in order to square a circle in which Brussels will not address the future without a firm line from London on settling what the EU sees as past debts and May will not settle without assurances about future trade.
May is due at a Brussels summit on Dec. 14-15 but EU officials insist that any breakthrough must be agreed at lower level first and weeks in advance to let the other 27 members agree a joint position. Progress in December is important for May as businesses seek clarity by the new year, when many will take investment decisions dependent on conditions after Brexit.
A British budget due on Nov. 22 will, however, complicate the task for May in persuading hardline Brexit supporters of any need to meet Brussels' demand for tens of billions of euros to cover liabilities incurred in 44 years of EU membership.
Barnier stressed that he was not looking for a number from London but for a clearer undertaking than May gave in September on how far Britain would "honor its obligations".
"It is absolutely vital if we are to achieve sufficient progress in December," Barnier told reporters, adding not all details had to be settled but there needed to be "sincere and real progress".
The clarifications should come within the next two weeks, Barnier said: "If that's not the case, then we will continue and that will pull back the opening of discussions on the future."
He said progress had to be made on all three key issues of the divorce talks - the money, the rights of EU citizens in Britain and how to avoid a "hard border" with EU-member Ireland.
Davis said both sides made substantial technical progress on all the issues that need to be addressed. "This is now about moving into the political discussions that would enable both of us to move forward," he said.
British discussions with other national governments do not appear to have breached the unity of the 27 for now. And German Chancellor Angela Merkel and French President Emmanuel Macron, the bloc's most powerful leaders, have taken a particularly tough line on the money issue in Brussels.
The EU executive has said Britain will owe it around 60 billion euros when it leaves. London has challenged the legal reasoning behind that but has not offered its own figure.
One thing that was clarified on Friday was exactly when Britain would leave the Union. The EU had previously defined "Brexit hour" as "midnight" on March 29, 2019, exactly two years after May triggered the process. But it was unclear whether that meant midnight in Brussels or London.
May and Barnier made statements on Friday stating that Brexit will happen in London at 11 p.m. (2300 GMT) on Friday, March 29. That will be midnight in the EU capital.
Davis repeated the declaration made by May in September in Florence that EU countries will not need to pay more or receive less for the remainder of the current EU long-term budget ending in December 2020: "The UK will honor the commitments we made during the period of our membership," he said.
Barnier said both sides moved ahead on citizens' rights and that Britain gave "useful" clarifications on a process through which EU citizens could obtain a "settled status" but the EU needed reassurances on how such a system would work.
He said issues related to family reunification, the right to export social security benefits and the role of the European Court of Justice still need work.
On the problems of avoiding a "hard border" between the British province of Northern Ireland and EU-member Ireland, Davis and Barnier said more work must be done.
(Additional reporting by Gabriela Baczynska; Writing by Jan Strupczewski; Editing by Philip Blenkinsop and Janet Lawrence)