Theresa May 'urges EU27 to agree swift transition period' at summit dinner

(c) Sky News 2017: <a href="">Theresa May 'urges EU27 to agree swift transition period' at summit dinner</a>

The PM was applauded by EU27 leaders at the EU summit dinner after German Chancellor Angela Merkel thanked her for her commitment in Brexit talks, say Sky (Frankfurt: 893517 - news) sources at the dinner.

The applause arose partly because Theresa May will not be at the summit today when the formal decision to approve "sufficient progress" in the Brexit process will be taken by the EU27.

Mrs May used the dinner opportunity to implore other EU leaders to agree a quick transition period, as well as complete the formality of "sufficient progress".

She (Munich: SOQ.MU - news) made "no secret of wanting to move on to the next phase and to approach it with ambition and creativity", said one official.

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She told leaders over a dinner of roast langoustine: "I believe this is in the best interests of the UK and the European Union. A particular priority should be agreement on the implementation period so we can bring greater certainty to businesses in the UK and across the 27."

But Sky News understands there have been some differences at this EU summit about just how quickly the transition talks can take place.

Firstly, they depend on whether the Government wishes to accept the "full acquis" under European Court of Justice jurisdiction, or wishes to use negotiation time on something bespoke.

More pertinently, one EU source suggested to Sky News that progress to quick transition talks would be contingent upon the establishment of a legally watertight drafting of the phase one agreement reached last week, but over which UK Cabinet ministers raised questions on legal enforceability.

It is possible that proper talks on transition may be agreed internally by the EU27 at the end of January, and not signed off until March, and then made a legal reality until the withdrawal agreement is fully signed off in October.

Sky News has seen the EU27 draft guidelines. The timing might disappoint some UK business groups which have told the Government that a watertight transition is required to avoid large corporates activating 'no deal' contingency plans.

In an exclusive interview, the Irish PM Leo Varadkar told Sky News: "The next step now is to turn that into a legally binding international agreement, which will be the UK withdrawal agreement.

"After that, we'll then move on to talking about the transition phases and then after that we'll talk about trade, discussing which British companies will be allowed to trade with Europe, which services and producers will have access to the signal market.

"And certainly from my point of view, we'd like to see the UK having as much access as possible."

He added: "We'll spend the next three months talking about the withdrawal agreement and putting into legal international agreement what was agreed last week."

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When asked if Ireland (Other OTC: IRLD - news) having been tough in phase one would now be the UK's best friend, Mr Varadkar said Ireland would remain a "close" friend.

"Ireland is a member of the European Union so our best friends are going to be the other 27 member states. But after that of course we'll be Britain's closest friend but as a remaining member," he said.

"Obviously our very closest relations have to be with other members of the EU just as they were our best friends in the weeks gone by."

It is understood that the EU27 guidelines will not refer a great deal to talks on a future trade deal. Multiple sources from EU nations said Mrs May had yet to outline a specific vision for the end state of negotiations, and that was a prerequisite for such talks.