Theresa May will set out vision for "bold new economic partnership" in today's Florence speech - but will it break the Brexit impasse?

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"We share a profound sense of responsibility to make this change work " (Source: Getty)

Theresa May will today set out her "vision for a bold new economic partnership" with the EU and will propose a formal period of transition in a bid to offer "certainty and clarity" to business.

The Prime Minister’s hugely anticipated speech in Florence this afternoon is expected to set out her vision of a two-year "implementation period" to avoid the prospect of cliff-edge, and will outline a bespoke future trade model.

“While the UK’s departure from the EU is inevitably a difficult process, it is in all of our interests for our negotiations to succeed,” May will say. “I believe we share a profound sense of responsibility to make this change work smoothly and sensibly, not just for people today but for the next generation who will inherit the world we leave them."

She is expected to pledge that no member state will pay more in or receive less from the EU budget than it was expecting for the duration of the UK’s membership. But whether the speech will do enough to allow negotiators to press on with talks on trade and transition, without giving a concrete guarantee on the sums, remains to be seen.

The Prime Minister spent more than two hours briefing cabinet ministers about the contents of the speech yesterday, in a bid to receive their backing before going public. Her argument that the future trade deal should be based on the new EU-Canada deal - dubbed “Ceta-plus – could have ruffled some feathers with ministers who would prefer a bespoke free trade arrangement.

But although foreign secretary Boris Johnson, chancellor Philip Hammond and Brexit secretary David Davis will attend the speech, no one from the European Commission is expected.

A spokesman for the EU told City A.M. that there would be no official representation from the EC, including chief negotiator Michel Barnier and his team. The spokesperson added Barnier was "not aware" of being sent an invitation, adding: "I don't know if we would go anyway."

However, speaking in Rome ahead of the fourth round of Brexit talks next week, Barnier said he would be listening “attentively and constructively” to what May had to say. The EU’s chief negotiator stressed that “time is of the essence”, insisting there was just one year left to strike an agreement.

He noted that a transition period would begin “when the United Kingdom is no longer a member of the European institutions, and therefore no longer takes part in the decision-making process," adding: “Without a withdrawal agreement, there is no transition. This is a point of law."

Barnier - who quoted the 16th century Italian politician and philsopher Machiavelli in saying "where there is great will there can be great difficulty" - said that the period could be extended but this would require "existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply – as recalled in the mandate I received from the European Council, under the authority of President Donald Tusk".

It would not be possible for the UK to have "the same benefits as the Norwegian model but the limited obligations of the Canadian model" – in other words, he rebuffed May’s notion of a bespoke model.