Britain's Prime Minister Theresa May has set out a plan to retain full access to the European Union's single market for two years after Brexit, in order to reassure business and reset the tone of stalled negotiations with Brussels.
- Ms May made concessions on EU citizens' rights in Britain
- She also said British courts would take EU court decisions into account
- The UK will also honour financial commitments made while an EU member
However her proposals for such a transition, while meeting Britain's financial obligations and protecting EU citizens' rights, fell short of what the EU wanted.
One official said the speech had left him "even more concerned".
In a speech in a 14th century church in Florence, Italy, Ms May appealed directly to EU leaders to unlock the talks that have stalled over a series of issues, including over how much Britain should pay as part of its divorce settlement.
She spent much of her 30-minute speech describing the similarities between Britain and the EU, warning that if the complicated talks to unravel more than 40 years of union should fail, the only beneficiaries would be those who oppose democracy, liberalism and free trade.
"Clearly people, businesses and public services should only have to plan for one set of changes in the relationship between the UK and the EU," Ms May told Italian business leaders and diplomats.
"During the implementation period, access to one another's markets should continue on current terms."
"Britain also should continue to take part in existing security measures," Ms May said.
Britain wants to move the talks forward and start addressing how a future relationship with the EU would work, a move Ms May's government says is vital if they want to find agreement on the divorce settlement bill currently under debate.
But the EU has stood firm, refusing to discuss trading arrangements until "sufficient progress" had been made on the first three issues — the financial settlement, the border with EU member Ireland and the protection of expatriates' rights.
'Constructive spirit' praised, but EU still wary
Beyond her vision for a transition, involving around two years of trading on same terms but no payments for access to the EU single market, Ms May pledged protection of EU citizens' rights in Britain after Brexit.
She said decisions by the European Court of Justice would be taken into account by British courts.
On the financial settlement, she also said Britain would "honour commitments we have made during the period of our membership".
"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," Ms May said.
But she said little on Ireland, beyond that both sides do not want a return to a "hard border" with Northern Ireland that could reignite tensions on the island.
Her "constructive spirit" won a cautious welcome from the European Union, though the speech raised more questions than answers for some — they want more details next week.
"The speech shows a willingness to move forward, as time is of the essence," the EU's chief Brexit negotiator Michel Barnier said in a lengthy statement, adding that Ms May's specially staged event in Renaissance Florence chimed with the spirit of Europe.
Echoing reactions from diplomats and officials involved in the negotiations, Mr Barnier said Ms May's concessions on EU citizens and case law was a "step forward".
But as with vaguer comments about the EU budget, Mr Barnier stressed that he wants to hear a "precise negotiating position" when he meets his British counterpart on Monday (local time).
Similarly, he repeated the EU position on refusing talks on what happens after Brexit in March 2019 until Britain makes "significant progress" in agreeing its divorce terms.
Opposition critical of speech
Britain's political opposition was not impressed, with the country's Labour Party saying the Government was "no clearer about what our long term relationship with the EU will look like".
Trade union leader Frances O'Grady described the Prime Minister as pretending "we can have our cake and eat it".
It was never going to be an easy speech, trying to appeal to both the EU and the pro-Brexit supporters in Ms May's own party, who want to keep her to her pledge for a clean break with the bloc.
"It's clear that we're out," one senior Conservative source said, adding that he was pleased to hear Ms May agree that no deal was better than a bad deal.
Despite disagreement, both sides agree on one thing — the clock is ticking, with Mr Barnier saying there is only a year left to find an agreement to stop Britain from crashing out of the bloc.
Ms May's ill-fated decision to have an election in June not only used up time but also sapped her authority and gave a stronger hand to pro-Brexit politicians who want a total break with the bloc and to reduce any divorce bill to zero.
Her top team of ministers put on a show of unity at the speech, with foreign minister Boris Johnson — one of Britain's most prominent hardline Brexit politicians and a one-time leadership contender — sitting on the front row.
"I think what was so uplifting about this speech was it was positive, it was confident about what Britain can do, but also about our relations with the rest of the EU," Mr Johnson said.