European Union's Michel Barnier to spell out Brexit transition demands

European Union's Michel Barnier to spell out Brexit transition demands

The House of Commons will hold its eighth and final day of detailed scrutiny of the EU (Withdrawal) Bill, which would formally end Britain's membership of the bloc and transfer EU rules into British law.

Legislation meant to smooth Britain's exit from the European Union moves a step closer to becoming law on Wednesday, as ministers begin working out what they want from Brexit.

Mr Barnier said talks on the transition will begin in earnest after a January 29 meeting at which the 27 remaining members are expected to approve negotiating guidelines agreed by the Commission in Brussels on Wednesday.

On top of that, he said, "all new rules adopted by the European Union during the transition will be applied to the United Kingdom", with the EU's highest court continuing to have authority.

But it should be over by the end of December 2020.

Last week, the European Union and Britain agreed that there was enough progress in negotiations so far to open them up to future relations and a trade deal.

The central bank said it made the decision on the assumption that a "high degree of supervisory co-operation with the EU" would continue after Britain leaves the bloc.

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Given the potential pitfalls, "although May will be reluctant to extend Article 50 negotiations or the length of the transition. there is a significant probability she will have to", said analyst Rahman.

In a tough speech, Mr Barnier said the transition must be for a "short and specific" period.

The Association for Financial Markets in Europe (AFME), grouping European banks, said the BoE's announcement would allow banks to get on with their planning for Brexit.

International Monetary Fund chief Christine Lagarde said in London on Wednesday that Britain's economy was "losing out" as a result of last year's vote to leave the European Union, but that any post-Brexit trade deal could help ease the pain.

Mrs May responded to that point at PMQs today, saying: "We are not going to exclude Gibraltar from our negotiations from either the implementation period or the future agreement".

In an interview with The Guardian and European newspapers, Mr Barnier said on Monday there is "no place" for financial services if the United Kingdom leaves the single market when it leaves the EU.

The Bank of England, seeking to protect the City of London's status as a global financial hub, said it would spare European banks costly capital rules after Brexit but warned of "consequences" if negotiations with Brussels turned sour.

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