On December 20, 2017, the European Commission proposed that the European Council should endorse the start of discussions on the next phase of the talks towards the UK's exit from the European Union, on a transitional arrangement that would apply for a period after the United Kingdom officially leaves the EU in March 2019.
The period between definitive formalization of Brexit and new relationship between two parties, refore, will be one year and nine months, something less than 2 years that British Prime Minister Theresa May referred last September, who wanted new rel Commence on March 29, 2021.
City of London policy chairman Catherine McGuinness called the proposals a "welcome bit of news to end the year for the City", with European Union banks playing a significant part in Britain's success in the industry.
But the European Union has agreed that the best date for it to end is on 31 December 2020, which is when the EU's multi-year budget ends.
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"From our point of view the logical end should be December 21, 2020", Barnier said at a press conference in Brussels as he presented the new Brexit negotiating guidelines produced by the commission, the EU's executive arm.
The deadline coincides with the end of the EU's 7-year budget period and has always been expected as the end date of the transition. Brussels has signalled a detailed trade deal is likely to take much longer, and that Britain's transition period must end by 2020.
"The transition period is useful and will enable Britain to get prepared for the kind of challenges that they will have to face, and to prepare also for the complications of the new relationship", Barnier said.
At the same time, Britain will enjoy all benefits and obligations of a single market during the transition period after Brexit, the bloc's representative has announced.
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The European Commission has approved guidelines covering Brussels' position on the transition, which have been drawn up by Michel Barnier.
The next phase comes as Barnier ruffled feathers in London on Tuesday with a warning that any ties after Brexit would inevitably result in Britain's financial companies losing full rights to trade across the bloc.
"We would only use this power in exceptional circumstances, for the shortest possible time, and an affirmative motion would be brought to the house", May told the House of Commons today.
The amendment will allow ministers to change the date of Britain's European Union exit from March 29 2019 if necessary, whilst preserving the government's desire to write that date into law.
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By allowing branches of European Union banks in London to be supervised by their home regulator, Britain will be hoping the bloc would in return allow euro clearing to remain in Britain.