Mrs. May was said to have called for working on a trade deal simultaneously with talks on Britain’s exit, arguing that since Britain is already a member and merely wants to leave, a trade deal should be much easier to complete.
Mr. Juncker somewhat theatrically dismissed the idea, reaching into his bag and pulling out two big stacks of paper: Croatia’s European Union entry deal and Canada’s free-trade pact, all 2,250 pages of it.
The two sides also differed on the question of how much Britain will have to pay as part of the “divorce settlement,” with Mrs. May reportedly saying it owes nothing because there is no mention of such payments in the European Union’s founding treaties.
Mr. Juncker was said to have replied that without a payment there would be no trade deal.
Ms. Merkel was concerned enough to issue a strong statement to the Bundestag, the lower house of Parliament, on Thursday, saying that Britain can work out a new relationship with the European Union only after it leaves. “I must say this clearly here because I get the feeling that some people in Britain still have illusions — that would be wasted time,” she warned.
She added: “We can only do an agreement on the future relationship with Britain when all questions about its exit have been cleared up satisfactorily,” while pointing out that serious negotiations could not start until after the British elections in June.
The reports on Sunday were detailed enough — and one-sided enough — that officials at 10 Downing Street issued an official statement on Monday, a holiday in Britain, rejecting the German newspaper’s version. “We do not recognize this account,” the statement said. “As the prime minister and Jean-Claude Juncker made clear, this was a constructive meeting ahead of the negotiations formally getting underway.”
On Sunday, on television news talk shows, Mrs. May acknowledged that the talks would be difficult but said to the BBC, “I’m not in a different galaxy, but I think what this shows, and what some of the other comments we’ve seen coming from European leaders shows, is that there are going to be times when these negotiations are going to be tough.”
She insisted that Britain could secure a comprehensive trade deal with the European Union alongside the divorce negotiations and complete everything in two years, with an “implementation period.”
Brussels officials regard that as unrealistic and point to the bloc’s “Brexit” negotiating guidelines, which mandate that talks on a future relationship can begin only after “sufficient progress” has been on three major issues: guaranteeing the rights of citizens of European Union member states living in Britain; settling the divorce bill; and safeguarding the 1998 Good Friday Agreement.
Mrs. May, who wants to resolve speedily the post-exit status of member-state citizens in Britain and British citizens in the bloc, suggested the issue could be settled at a summit meeting at the end of June. Mr. Juncker and his top officials considered that timetable unworkable given what they consider the complications of pensions, legal rights and the right to health care.
The issue is especially complicated because Mrs. May wants the exit to end the jurisdiction in Britain of the European Court of Justice, but it is that court that currently settles legal disputes among member states.
Britain also wants complete secrecy for the negotiations, which Brussels believes violates the principle of transparency — and as the various newspaper accounts prove, leaks will be numerous in any case.
While the dinner was about opening stances in the talks, the gaps reportedly made Mr. Juncker more skeptical that a deal could be done in two years, before Britain leaves the bloc, making a “hard Brexit” more likely. “I leave Downing Street 10 times as skeptical as I was before” about a deal, Mr. Juncker reportedly told Mrs. May as he left the dinner.