British Prime Minister Theresa May sought to kick start Brexit negotiations on Friday, proposing to delay the impact of the UK’s withdrawal from the EU with a two-year transition period.
In return for continued access to the EU single market, the UK would honor its budget commitments of about 10 billion euros (about $12 billion) year, remain bound by EU laws and accept continued immigration from Europe.
But May said the transition should be “strictly time-limited” and replaced as soon as practicable by a bespoke, “creative” partnership that would respect the result of last year’s EU referendum.
UK and EU leaders share a “profound sense of responsibility” to make the process work “smoothly and sensibly” for this and future generations, she said at the Santa Maria Novella church in Florence, Italy.
“The eyes of the world are on us, but if we can be imaginative and creative about the way we establish this new relationship, if we can proceed on the basis of trust in each other, I believe we can be optimistic about the future we can build for the United Kingdom and for the European Union,” she said.
The top EU negotiator, Michel Barnier, welcomed the “constructive spirit” of the speech but warned that Britain would have to accede to all existing EU rules and oversight to retain access to the single market during any transition period. “The speech shows a willingness to move forward, as time is of the essence,” he said.
Key points of May’s speech
Transitional arrangements: May conceded that the Britain would not be ready to implement a Brexit deal when the UK formally leaves the EU in March 2019. A transition period would also be required for the UK to conclude a trade deal with the EU.
To ease the process, May proposed a transition of about two years, during which the EU and UK would have access to each other’s markets on current terms, retaining the “existing structure of EU rules and regulations.”
Financial obligations: The Prime Minister made it clear that the UK would not shirk its financial obligations during the transition period. “I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave,” she said.
For the first time, May said that the UK would make ongoing payments to the EU even after the transition period, to cover joint programs in areas like security, science and culture. The UK would make an “ongoing contribution to cover our fair share of the costs involved,” May sad.
Trade deal: May rejected an off-the-shelf post-Brexit deal like the close relationship enjoyed by Norway within the European Economic Area or the detailed trade arrangement recently concluded with Canada. Such a choice was “stark and unimaginative,” May said, adding that Britain and the EU could do “so much better.”
“European Economic Area membership would mean the UK having to adopt at home – automatically and in their entirety – new EU rules. Rules over which, in future, we will have little influence and no vote,” she said. But a Canadian-style trade deal would “represent such a restriction on our mutual market access that it would benefit neither of our economies.”
EU citizens’ rights: May said she aimed to make sure that EU citizens living in the UK – including 600,000 Italians – felt appreciated. “We want you to stay, we value you, and we thank you for your contribution to our national life,” she said. But she did not offer any more details beyond the proposals already outlined by the UK.
Security: A passage in May’s last landmark Brexit speech in January was interpreted as a threat to withdraw security cooperation from Europe if a favorable Brexit deal was not concluded. On Friday, May sought to reject that notion, stressing Britain’s continuing commitment to protecting European security in the face of global threats.
“Our determination to defend the stability, security and prosperity of our European neighbors and friends remains steadfast,” she said.
Barnier, the EU’s chief negotiator, gave a cautious welcome to the speech, praising its “constructive spirit” and signaling a willingness on the part of the EU to consider a formal transition period. But he warned that any extension of EU rights would require the UK to be bound by existing obligations, such as the freedom of movement of all EU citizens.
But he said that May’s words must be turned into specific negotiating positions when the fourth round of Brexit talks begins on Monday. “Prime Minister May’s statements are a step forward but they must now be translated into a precise negotiating position of the UK government,” he said.
Barnier noted that May did not offer any clarity on how to resolve the vexed question of the Irish border – Northern Ireland will remain part of the UK and the Republic of Ireland will stay in the EU. The restoration of a “hard” border between the territories threatens to undermine the Good Friday Agreement, which ended 30 years of sectarian conflict in Northern Ireland.
“Today’s speech does not clarify how the UK intends to honour its special responsibility for the consequences of its withdrawal for Ireland,” he said.
Manfred Weber, leader of the pro-European, center-right European People’s Party in the European Parliament, gave the speech a lukewarm reception, tweeting: “In substance PM May is bringing no more clarity to London’s positions. I am even more concerned now.”
He added: “The clock is ticking and time is running faster than the government believes in London.”
The pace of Brexit negotiations has so far frustrated EU and business leaders.
The third round of talks ended last month in a very public dispute over how much Britain should pay in a divorce settlement, an issue the EU says must be resolved before the parties’ future trading relationship – Britain’s key concern – can be discussed.
Divisions have also emerged within May’s government. Foreign Secretary Boris Johnson appeared to undermine her position just last weekend with a 4,000-word article in the Telegraph newspaper setting out his own Brexit vision.
May will hope that her speech will satisfy demands from the European Union for clarity on Britain’s position, as well as placating the “hard-Brexit” wing of her Conservative Party, who are adamantly opposed to any arrangement that looks like ongoing EU membership in all but name.
Johnson tweeted a positive response to May’s speech on Friday, however, saying: “PM speech was positive, optimistic & dynamic - and rightly disposes of the Norway option! Forwards!”
He added: “A strong Britain working hand in hand with a strong Europe - but once again free to take our own decisions.”
CNN’s Richard Allen Greene and Matt Wells contributed to this report.