Germany: no punishment for UK, but EU exit good for no one

Speaking to the BBC on Sunday, finance minister Philip Hammond said a "no deal" outcome "would be a very, very bad outcome for Britain".

The Chancellor admitted that a no-deal Brexit would be "very, very bad" for the British, but said a deal that would "suck the lifeblood out of our economy" was a worse prospect.

Britain's Brexit ministry said the team travelling to Brussels was confident it could achieve a "bold and ambitious deal" and forge a new, close arrangement with the bloc.

Brexit Secretary David Davis has said Britain will seek "a deal that works in the best interests of all citizens" in Brexit talks getting under way in Brussels.

Britain appears to have given in on the EU's insistence that the negotiationsfirst focus on three key divorce issues, before moving onto the future EU-UK relationship and a possible trade deal.

Ahead of the talks, Mr Davis stressed that the other 27 countries should be in "no doubt" that Britain is heading for the exit. "In a second step, we will scope our future partnership".

May has said she is open to some kind of association agreement with the customs union and wants to avoid any so-called "cliff-edge" into uncertain trading conditions, but she has also said Britain must be able to control immigration - something it can not do while a member of the EU.

Mr Hammond indicated temporary exit measures could be put in place for a couple of years before a final deal is sealed.

"We're leaving the EU and because we are leaving the EU, we will be leaving the single market and, by the way, we will be leaving the customs union".

The letter said: "The business community fully accepts the decision of voters last June that the United Kingdom will leave the European Union".

"The best way we can spend this week is to rebuild trust", another European source said.

But she now faces growing opposition at home to this, and her threats to walk away without a deal, in the wake of this month's general election in which she lost her centre-right Conservative party's parliamentary majority.

Ms Davidson called for an "open Brexit" that put the needs of the economy before cutting immigration, although a Scottish Conservative spokesman later denied suggestions that she was seeking continued membership of the single market, which requires the free movement of European Union nationals.

Still, British Foreign Secretary Boris Johnson remained upbeat Monday and thinks that the Brexit negotiations will yield "a happy resolution that can be done with profit and honour for both sides".

European Union officials say narrowing differences over the payment, for which both sides agreed on Monday to set up a working group of negotiators, will be a major test for the forthcoming talks.

"We're leaving the EU and because we are leaving the EU, we will be leaving the single market and by the way, we will be leaving the customs union". When one interviewer asked if he had been locked in a cupboard during the campaign by May's aides, he said with a smirk: "Not quite in a cupboard".

"I wish it was a joke but I fear it isn't", former Swedish Prime Minister Carl Bildt tweeted a year ago when May made Johnson her foreign minister. She's got no mandate here and she's got no authority overseas and the negotiation starts tomorrow.

We need a transitional arrangement to get from where we are now to whatever future arrangements we agree with the EU.

David Davis Jeremy Corbyn said Labour favoured a softer Brexit deal.

Supporters of Jeremy Corbyn's party prioritise unrestricted trade over immigration controls by a margin of 64 per cent to 19 per cent, a YouGov study found.

May herself will also have a chance to update the other 27 European Union leaders on her Brexit plans at a summit meeting in Brussels on Thursday.

The title is a mouthful and the task is even more challenging for Davis, a long-serving lawmaker and staunch Euroskeptic who served under Conservative Prime Minister John Major in bruising 1990s dealings with the EU.

"To that end we are starting this negotiation in a positive and constructive tone, determined to build a strong and special partnership between ourselves, our European allies and friends", Davis said.

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