EU's Barnier presses UK on Irish border Brexit problem

BRUSSELS (Reuters) - The European Union's Brexit negotiator Michel Barnier stepped up pressure on the United Kingdom on Monday to propose how to avoid having a physical border with the Republic of Ireland if London wants to get a good trade deal with the EU.

In a dig at British rejection of special customs rules that would differentiate Northern Ireland from the rest of the United Kingdom - anathema to Prime Minister Theresa May's Northern Irish allies - Barnier noted existing regulatory differences between the province and the British mainland.

He also reiterated the bloc's refusal to cut a special deal with the City of London's big financial industry, insisting that once Britain leaves Europe's single market, British firms would still have access to it, but on inferior terms to membership.

Ahead of a summit next month to review Britain's progress on meeting EU divorce conditions, the Irish government has voiced concern that London is failing to explain how it plans to limit economic and social disruption on the island. Dublin says it is confident that other EU states support its demands for clarity.

Leaders fear re-establishing a physical border could lead to renewed sectarian violence in the north, after the Good Friday Agreement of 1998 largely ended three decades of bloodshed.

Barnier said the EU could not compromise on the integrity of its single market and allow customs-free EU trade with Northern Ireland unless the British province subscribed to EU rules.

"Some in the UK say that specific rules for Northern Ireland would 'endanger the integrity of the UK single market'," Barnier said in a speech at the Centre for European Reform in Brussels, referring to comments by the British minister for Northern Ireland two weeks ago.

"But Northern Ireland already has specific rules in many areas that are different to the rest of the UK."

He cited the power market and plant and animal health rules.

"I expect the UK, as co-guarantor of the Good Friday Agreement, to come forward with proposals. Those who wanted Brexit must offer solutions," he said.

The EU also expects London to come up with a more concrete offer on what past financial commitments it will honour on leaving and what will be the rights of EU citizens in Britain.

This must happen by early December, the chairman of EU leaders Donald Tusk told May on Friday, if EU leaders are to declare at their Dec. 14-15 summit that enough has been achieved to start talks on a transition period and a trade deal.

NO "CHERRY-PICKING"

"The British really need to make a push. We finally need clarity," Germany's EU minister Michael Roth said on arrival at a meeting in Brussels.

"We are interested in moving to the second stage of negotiations, but for now I see no chance that there will be a signal coming from the European Council in December that these talks can begin."

May's government is under pressure from business to clarify British trade terms with the EU after March 29, 2019.

Barnier said that, while the EU wanted an "ambitious" future trade partnership with Britain, access to the EU's single market would be at terms inferior to the current full membership and there could be no "cherry-picking" of single market areas.

"Brexit means Brexit, everywhere," he said, rejecting suggestions by some in Britain that British financial services companies could get special treatment because of the importance of the City of London to EU businesses.

"The legal consequence of Brexit is that UK financial service providers lose their EU passport."

He said a trade agreement with Britain would mean London maintaining similar standards to the EU on tax, food safety, state aid and social and environment standards.

"The UK has chosen to leave the EU. Does it want to stay close to the European model or does it want to gradually move away from it?" Barnier asked.

"The UK's reply to this question ... will shape ... the conditions for ratification of that partnership in many national parliaments and obviously in the European Parliament."

(Writing by Jan Strupczewski; editing by Andrew Roche)