Theresa May proposes to delay Brexit impact with 2-year transition period

British Prime Minister Theresa May gives her landmark Brexit speech in Florence, Italy, on Friday.

(CNN)British Prime Minister Theresa May sought to kick start Brexit negotiations on Friday, proposing to delay the impact of the UK's withdrawal from the EU with a two-year transition period.

In return for continued access to the EU single market, the UK would honor its budget commitments of about 10 billion euros (about $12 billion) year, remain bound by EU laws and accept continued immigration from Europe.
But May said the transition should be "strictly time-limited" and replaced as soon as practicable by a bespoke, "creative" partnership that would respect the result of last year's EU referendum.
    UK and EU leaders share a "profound sense of responsibility" to make the process work "smoothly and sensibly" for this and future generations, she said at the Santa Maria Novella church in Florence, Italy.
    "The eyes of the world are on us, but if we can be imaginative and creative about the way we establish this new relationship, if we can proceed on the basis of trust in each other, I believe we can be optimistic about the future we can build for the United Kingdom and for the European Union," she said.
    The top EU negotiator, Michel Barnier, welcomed the "constructive spirit" of the speech but warned that Britain would have to accede to all existing EU rules and oversight to retain access to the single market during any transition period. "The speech shows a willingness to move forward, as time is of the essence," he said.

    Key points of May's speech

    Transitional arrangements: May conceded that the Britain would not be ready to implement a Brexit deal when the UK formally leaves the EU in March 2019. A transition period would also be required for the UK to conclude a trade deal with the EU.
    To ease the process, May proposed a transition of about two years, during which the EU and UK would have access to each other's markets on current terms, retaining the "existing structure of EU rules and regulations."
    Financial obligations: The Prime Minister made it clear that the UK would not shirk its financial obligations during the transition period. "I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave," she said.
    For the first time, May said that the UK would make ongoing payments to the EU even after the transition period, to cover joint programs in areas like security, science and culture. The UK would make an "ongoing contribution to cover our fair share of the costs involved," May sad.
    Trade deal: May rejected an off-the-shelf post-Brexit deal like the close relationship enjoyed by Norway within the European Economic Area or the detailed trade arrangement recently concluded with Canada. Such a choice was "stark and unimaginative," May said, adding that Britain and the EU could do "so much better."
    "European Economic Area membership would mean the UK having to adopt at home -- automatically and in their entirety -- new EU rules. Rules over which, in future, we will have little influence and no vote," she said. But a Canadian-style trade deal would "represent such a restriction on our mutual market access that it would benefit neither of our economies."
    EU citizens' rights: May said she aimed to make sure that EU citizens living in the UK -- including 600,000 Italians -- felt appreciated. "We want you to stay, we value you, and we thank you for your contribution to our national life," she said. But she did not offer any more details beyond the proposals already outlined by the UK.
    Security: A passage in May's