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LONDON – Theresa May is expected to lay out her plans for a “status quo” transitional deal after Brexit that she hopes will satisfy the EU’s demands over the so-called “Brexit bill” in a speech to world media next week.
The prime minister will use a keynote speech in Florence, Italy, next Friday to suggest the sort of transitional period that Chancellor Philip Hammond has described a “status quo” arrangement, the Financial Times reports.
The term “status quo” describes a scenario where Britain would continue with many aspects of EU membership during a period lasting up to three years commencing after Brexit day in March 2019. This could include staying both in the single market and customs union until a long-term arrangement post-Brexit is ready to be implemented.
British officials and business reportedly regard this proposal as crucial. It could go a long way to resolving the tricky issue of the Brexit divorce bill that has stunted progress in Brexit negotiations.
That’s because May’s proposal could include Britain making financial contributions to the EU during the transition, helping to pay off a major chunk of the €30 billion it has reportedly been told it owes in financial obligations.
The EU has repeatedly insisted that it will not discuss its future relations with Britain, including trade, until “sufficient progress” is made on Brexit bill, along with the issues of the Irish border and citizens’ rights.
The FT adds that EU officials welcome the move but warn that full access to the single market beyond Brexit day will incur additional costs, meaning there will still be money for Britain to hand over at the end of the process. “Obviously should there be transition … there is a contribution to make for that single market participation which is independent and on top of any debts from the past,” a senior EU official reportedly said.
A “status quo” transition would be regarded as a victory for Hammond who has argued for a “business-friendly” Brexit in the face of opposition from Tory Brexiteers who want Britain’s exit from EU institutions to be as swift as possible.
The Labour Party has said it would keep Britain both in the single market and customs union during transition and would consider remaining in both on a permanent basis after Brexit should no other means of retaining their benefits be available.