Florence: British prime minister Theresa May on Friday called for a two-year transition after Brexit in which Britain would largely maintain its current ties with Brussels, in a charm offensive intended to unlock stalled negotiations with the European Union.
In a major speech in Florence, May promised to meet Britain's existing EU budget commitments until 2020 and outlined new legal guarantees for the rights of around three million EU nationals living in Britain.
She also committed to maintaining Europe's security, saying in a direct pitch to EU leaders, "We want to be your strongest friend and partner as the EU and UK thrive side by side."
A fourth round of negotiations with the European Commission is due to start next week, with London keen to make progress on the terms of the divorce so that talks can move on to trade.
"While the UK's departure from the EU is inevitably a difficult process, it is in all of our interests for our negotiations to succeed," she said.
May said she wanted a transition period after Brexit in March 2019 of "around two years" during which "access to one another's markets should continue on current terms" for Britain and the EU.
She also promised to honour Britain's financial commitments for the remainder of the EU's current budget plan.
Britain's contributions for two years would be at least $24 billion – though this falls well below European estimates of Britain's total Brexit bill.
Within hours, Moody's Investors Service cut its long-term credit rating for Britain, citing the economic uncertainty sparked by the Brexit negotiations and the likelihood of weaker public finances.
Moody's dropped its grade by one notch, to Aa2 from Aa1 with a stable outlook, which reflects expectations Britain's debt will "continue to rise" and worries that any UK-EU trade agreement "would not award the same access to the EU... that the UK currently enjoys".
The EU's chief Brexit negotiator Michel Barnier welcomed the "constructive spirit" of the speech, but said he would wait to hear the "concrete implications" – particularly on the money.
He said that if Britain wanted to continue to benefit from access to the single market after it leaves the EU, all existing rules must apply.
French president Emmanuel Macron noted "advances" and "openings" in May's speech.
"The signals sent by the British prime minister show a willingness" ahead of next week's round of negotiations, he told reporters.
But Brexit campaigner Nigel Farage expressed outrage at the idea, saying: "Theresa May's Brexit vision is that we leave the EU in name only. All areas of integration we have currently will be rebadged."
EU citizens' rights
May's speech came 15 months after Britain's referendum vote to leave the EU and six months after she triggered the two-year Brexit process, amid increasing demands by Brussels for more clarity.
One problem was that her own government is still divided – a fact highlighted this week when Foreign Secretary Boris Johnson laid out his own vision for life outside the EU.
After the speech, he said May's words were "uplifting".
Although May did not rule out her previous threat of walking away from the talks, she expressed optimism that a deal could be done.
On the issue of EU citizens' rights, she sought to break the deadlock over the role of the European Court of Justice (ECJ) as the arbiter in any disputes.
She said the final deal agreed with Brussels would be fully incorporated into British law.
A small group of British expatriates had gathered outside the Santa Maria Novella church complex where May spoke, holding up signs saying "Hands off our rights".
Creative and practical
May is hoping her speech will be enough to unlock the talks in time for an EU leaders meeting on 19-20 October, when her 27 counterparts will decide if talks can move onto trade.
Charles Grant of the Centre for European Reform said May was "right to adopt a positive tone", but added that her offers were "not enough to unblock" the talks.
The shape of that future trade deal remains elusive, though the prime minister insisted there could be no role for the ECJ – a totemic issue for eurosceptics in Britain.
She rejected the idea that Britain could adopt a model similar to that enjoyed by Norway, or a free-trade agreement like the one recently struck between the EU and Canada.
"Instead let us be creative as well as practical in designing an ambitious economic partnership," she said.
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Updated Date: Sep 23, 2017 09:02:15 IST