May Makes Commitment on Cash in Bid to Break Brexit DeadlockBy , , and
Florence speech seeks multi-year transition to end in 2021
EU’s Barnier praises ‘step forward’ as talks set to resume
U.K. Prime Minister Theresa May appeared to have broken the stalemate in Brexit negotiations after signaling for the first time a readiness to start discussing the bill the European Union wants to impose.
In delivering her most detailed roadmap yet for the divorce, May gave the clearest indication yet that Britain will pay to smooth its departure from the bloc. Her words were immediately welcomed by the EU’s chief negotiator Michel Barnier.
“The U.K. will honor commitments we have made during the period of our membership,” May said in a much-anticipated speech in the Italian city of Florence. A government official later clarified that meant she was open to discussing financial commitments beyond the scope of the EU budget, and the U.K. would honor its dues more broadly.
She made the promise while also proposing paying money and accepting the EU’s rules for two years after Brexit takes effect in March 2019 in return for a transitional period which mirrors the status quo of tariff-free, regulation-light commerce -- and freedom of movement.
The cost of such an implementation phase could run to about 20 billion euros, but the so-called Brexit bill could stretch to five times that in gross terms. EU governments say while they don’t need to see a final sum yet, Britain must help find a way to calculate it before they approve the start of talks on a long-term trade deal.
Barnier said May had made a "step forward" and praised her "constructive spirit," but advised her to craft a “a precise negotiating position" for when talks resume in Brussels on Monday. French President Emmanuel Macron said May had made "advances."
Other key audiences also praised May’s speech. Businesses welcomed her talk of a transition that would keep trading conditions unchanged, having previously warned of a rupture in 2019. May said businesses should only have to make one change, taking on board an idea first floated by Chancellor of the Exchequer Philip Hammond.
She also won the endorsement of Foreign Secretary Boris Johnson seven days after he warned her against going soft on the EU and appeared to be on the brink of resigning. “PM speech was positive, optimistic & dynamic,” he said on Twitter.
Pressing the reset button on Brexit, May also offered more legal protections than she has previously for EU nationals residing in the U.K. by saying British courts would take account of relevant European judgments. She also called for deeper cross-continent cooperation on security, and described the U.K.’s commitment as “unconditional,” having once been accused of blackmailing the EU by using such help as a bartering tool.
One of the most notable aspects of her speech was the change in tone eight months after she outlined plans for a "hard Brexit" in a speech at London’s Lancaster House. In Florence she repeatedly discussed "shared" goals and also said the U.K. wanted to remain part of EU programs that promoted education, science and culture and that it would pay to do so.
In return for the change in tack and new willingness to discuss money, she wants the EU to soon start crafting a sweeping trade deal unlike any other.
In a nod to the most ardent Brexit supporters, she ruled out joining Norway in the European Economic Area, which would make the U.K. a rule-taker and subject to freedom of labor movement. She also rejected xeroxing the EU’s commercial pact with Canada, which she described as not ambitious enough.
Instead she said a stronger accord should be easy to arrange given the U.K. and EU already enjoy four decades of legal links and compatible regulation and that it was in the interest of both their economies to maintain easy trade. She dropped earlier talk of being prepared to walk away without a deal, and indicated that the U.K. wouldn’t resort to attempts to undercut the EU by slashing tax and regulation.
“I look ahead with optimism,” May said “We want to work hand in hand with the European Union rather than as part of the European Union.”
The prime minister is trying to maintain a precarious balance between the demands of Europe and those of her own Conservative party colleagues. May’s position is even more difficult at home, where her political authority has been eroded after a botched election cost the party its parliamentary majority.
May must somehow deliver a clean enough break with the EU to satisfy the euroskeptics in her Tory party, while giving enough away to Brussels to keep the talks on track.