EU warns 'miracles' needed for Brexit progress

[TALLINN. Estonia] The EU warned Friday that Britain needs a miracle to unlock the next phase of Brexit talks by next month as it hopes, as leaders discussed the post-Brexit reform plans of French President Emmanuel Macron.

The talks in Tallinn, Estonia were supposed to be devoted to the digital future of Europe, but Britain's departure from the bloc and Macron's plans to reboot the union hijacked the agenda.

The youthful French leader has given new impetus to a year of European soul-searching after the Brexit vote, even as the bloc tries to sort out the nitty-gritty before Britain leaves in March 2019.

European Commission chief Jean-Claude Juncker warned that there was next to no chance that the divorce talks would get far enough by the end of next month to move on to discussions on a future trade deal, a crucial demand of Britain.

"By the end of October we will not have sufficient progress," Mr Juncker said as he arrived for the second day of the summit. "I'm saying there will be no sufficient progress from now until October unless miracles will happen." EU leaders are set to decide at a summit on October 19-20 whether there has been "sufficient progress" on three key issues: Britain's exit bill, the fate of Northern Ireland, and the rights of EU citizens living in Britain.

British Prime Minister Theresa May, however, insisted there had been "very good progress" on the rights of EU expatriates, following a major Brexit speech she gave in Florence, Italy, last week.

EU negotiator Michel Barnier and his British counterpart David Davis wrapped up a fourth round of Brexit negotiations in Brussels on Thursday saying there had been progress following Mrs May's speech.

Irish Prime Minister Leo Varadkar said there was a "better vibe and a better mood" coming from the talks, but added it was "still very evident there's more work to be done." Estonia, which currently holds the EU's six-month rotating presidency, bills itself as among the avant-garde of the digital revolution and called the summit to help promote tech in Europe.

At the digital talks, Mr Macron was expected to push sceptical counterparts to overhaul tax rules so that more of the profits from Silicon Valley giants such as Facebook and Google fall into Europe's public coffers.

In his closely watched speech on Europe on Tuesday, Mr Macron thundered against high tech companies that had become the "freeloaders of the modern world".

The proposal was part of a wider vision that the 39-year-old leader unveiled in a landmark speech in Paris, aimed at reviving a European project hurt by Brexit, populism and the refugee crisis.

"There's a collective wake-up call that a leap forward is indispensable in Europe," Mr Macron said as he arrived for the second day of talks.

At dinner in the Estonian capital on Thursday, EU national leaders held a debate about Mr Macron's plans.

German Chancellor Angela Merkel, the EU's most powerful leader, indicated her support for Mr Macron's new vision.

"There is a wide agreement between France and Germany when it comes to the proposals, although we must work on the details," said Mrs Merkel, who won re-election on Sunday, but with a disappointing result that saw big inroads by anti-immigrant nationalists.

AFP