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Get Ready Now for Brexit, EU's Barnier Tells Business

by Reuters

   STRASBOURG, FRANCE --

   Businesses had better move fast to prepare for Brexit in under two
   years and should not count on long transition periods to cushion the
   impact of Britain leaving the European Union, the EU's chief negotiator
   said on Wednesday.

   Many businesses, notably in London's financial services sector, which
   is dominant in Europe, or among manufacturers wary of new tariff
   barriers are considering relocating parts of their operations from
   Britain. But few have made firm decisions until they see what kind of
   new trading relationship can be agreed.

   Defending his planned phasing of negotiations to start next month --
   under which talks on trade will not start until other issues are
   settled -- Brexit negotiator Michel Barnier told the European
   Parliament he wanted to build trust to forge a deal that suits both
   sides and warned that no deal was a bad option.

   Responding to questions from lawmakers, he also stressed the tight
   timetable for offering legal clarity to firms and people before a
   two-year negotiating window closes in March 2019 and Britain is out of
   the EU, deal or no deal. Even with agreement, he warned, they should
   not rely on gentle transition periods.

   "Possibly we will work on transition periods after Brexit, after
   Britain leaves, periods of phasing out and of phasing in toward the
   future relationship," Barnier said.

   "But the real transition period is now, before withdrawal," he said. "I
   recommend that particularly all economic actors make good use of this
   period so that withdrawal, on the day it happens, probably in March
   2019, is as orderly as possible."

   Barnier confirmed he expects to start talks after the British election
   on June 8. He said Prime Minister Theresa May's move to call a vote she
   is expected to win handsomely offered the prospect of a stable
   government that could help negotiations.

   'No Punishment'

   He rejected criticism in Britain of his refusal to launch negotiations
   on a future EU-UK free trade pact before the Union sees "significant
   progress" on a divorce treaty focusing on the rights of expatriate
   citizens, the Irish border and a financial settlement to cover
   outstanding British commitments to the EU.

   "This sequencing is not done to create problems, or as some kind of
   punishment for the United Kingdom," Barnier, a former French foreign
   minister and EU financial services commissioner said. "It is there to
   solve problems and put them in the right order.

   "It is there to create the basis of trust," he added. "We have to lay
   down a foundation of trust which we will need to construct the future
   relationship with the United Kingdom."

   Responding to a charge during the debate from Nigel Farage, leader of
   the UK Independence Party, that Brussels was trying to "bully" Britain
   and was seeking 100 billion euros or more in a financial settlement,
   Barnier warned that Farage's suggestion that Britain should simply walk
   out without a deal was unwise.

   "The option of no deal or a bad deal does not come from me," said
   Barnier, who has previously said that a threat by May to leave with no
   deal would be much more disruptive for Britain than it would be for the
   Union: "We want to reach an agreement with the United Kingdom, not
   against the United Kingdom."

   He repeated that he had never himself cited a figure for the possible
   bill Britain would have to pay. His priority is to agree how it should
   be calculated, while the actual final amount will depend on
   developments in the EU budget among other things.

   "We will work with the British, calmly and without fuss," he said, "To
   find an agreement on the commitments which have been made. There is no
   punishment, there is no 'exit bill'."