U.K. Prime Minister Theresa May attempted to accelerate Thursday, but her European counterparts want to know how much London will pay to exit the bloc.
May wrote a letter, published Thursday morning, reassuring all European citizens living legally in the U.K. that they can remain.
"I couldn't be clearer: EU citizens living lawfully in the U.K. today will be able to stay," she wrote. "But this agreement will not only provide certainty about residence, but also healthcare, pensions and other benefits."
Though her words were welcomed in Brussels, European officials said that without a proposal and agreement on budgetary commitments by mid-December, there will be a hard Brexit — meaning that after March 2019, the EU and the U.K. would be trading under World Trade Organization rules with higher costs for businesses.
"Without budget agreements, we can't reach a deal before December and then everything derails and we head towards a hard Brexit," a EU official, who didn't want to be named due to the sensitivity of the talks, told CNBC Wednesday.
Teams of negotiators are on citizens' rights, the Irish border, and payments that the U.K. will have to make before leaving. Despite the commitment made by May on citizens' rights, all three areas have a long way to go and the U.K. hasn't yet come up with a figure for its financial obligations to the European Union.
Without an agreement on these issues before mid-December, European leaders will not be in a position to kick off talks on trade and the future relationship by the end of the year. This raises the questions whether the process will conclude in time to be approved by all European institutions before the date that the U.K. leaves the bloc — March 29, 2019.
European leaders are gathered in Brussels today and Friday for a summit, part of which is devoted to Brexit negotiations.
Arriving in Brussels, May said: "We will also be looking at the concrete progress that's been made in our exit negotiations and setting out ambitious plans for the weeks ahead… I particularly, for example, want to see an urgency in reaching an agreement on citizens' rights."
EU leaders, however, are set to call on technical teams to begin preparing for talks on trade and the future. This is to ensure that should the U.K. and EU make sufficient progress on the three key areas by mid-December, they will be ready to talk trade immediately.
"We're not confident (of an agreement by mid-December), we're hopeful," an EU official, speaking on the condition of anonymity, told reporters in Brussels on Tuesday. "Since we hope we want to be ready for that."