U.K. Prime Minister Theresa May called on Friday for Britain to stay in the European Union's single market during a roughly two-year transition out of the EU while offering concessions on a divorce deal as she appealed for a revival of Brexit negotiations.

In a speech in a 14th-century church in Florence, May spent much of the speech drawing on the similar values of Britain and the rest of the EU. She said if the complicated talks to unravel more than 40 years of union should fail, the only beneficiaries would be those who oppose democracy, liberalism and free trade.

The pound weakened about half a penny against the euro and three-quarters of a cent against the dollar during her speech, underlining the sensitivity of the talks to markets and firms, some of which fear Britain could crash out of the bloc without a deal.

"For while the U.K.'s departure from the EU is inevitably a difficult process, it is in all of our interests for our negotiations to succeed," she told Italian business leaders and diplomats.

"If we were to fail, or be divided, the only beneficiaries would be those who reject our values and oppose our interests."


Demonstrators hold flags ahead of May's speech in Florence. (Max Rossi/Reuters)

In Florence, May drew on the history of an Italian city made wealthy by trade and banking during the Renaissance to underline her desire for Britain to become a major European trading power after leaving the bloc.

Her words were aimed at unlocking the first phase of negotiations with the EU, all but stalled over one of the most symbolically important questions: how much will it cost Britain, in hard cash, to end its EU membership in March 2019?

Since triggering the divorce process, May has repeatedly said that Britain would honour its obligations, but has also been under pressure from pro-Brexit supporters in her Conservative Party to reduce the bill or even bring it down to zero.

'Meets its obligations'

Britain has expressed frustration at the EU's demand for progress on the exit bill it must pay — if not an exact amount — before talks can move on, with British ministers keen to start negotiating the terms of its new relationship with the bloc.

Brussels has recoiled at Britain's approach, criticising a lack of detail and policy direction.

The BBC reported that May would say Britain is willing to pay 20 billion euros ($29 billion Cdn) to the EU during a post-Brexit transition period, but only if it has access to the bloc's single market.


A demonstrator's banner rests on a bench on Friday. (Max Rossi/Reuters)

But her transport minister, Chris Grayling, said the speech was not about specific details that would be dealt with during the negotiation but rather driven by May's wish to set out the principles of future links with the EU.

Asked whether Britain will offer a financial settlement to the EU in the speech, Grayling told the BBC: "We are a nation that meets its obligations."

May's office said she would detail her plan for a "time-limited implementation period" — something the government has previously said it thinks is needed to allay business concerns about the exit — but gave no further details.

The EU's chief negotiator said May needed to make a firm offer on pivotal issues, including the Brexit bill, before the start of the next round of negotiations next week.

"To make progress, we are waiting for clear commitments from the U.K. on these precise issues," Michel Barnier said.


A woman holds up a placard that reads, 'May the farce be with you.' (Max Rossi/Reuters)

May's speech comes at the start of a crucial week for Europe.

On Sunday, German voters are expected to return conservative Chancellor Angela Merkel to power but also vault eurosceptic parties into parliament, including the Alternative for Germany (AfD) whose nationalist, anti-immigrant ideas echo those of Britain's UKIP party, a driving force behind Brexit.

Two days later, French President Emmanuel Macron is expected to flesh out his ideas for a "relaunch" of the EU and euro zone, underscoring the bloc's determination to press ahead with a closer union that excludes the U.K.

'Allowed Brexit to go sour'

May's leadership has been hamstrung by the June general election she called to win a mandate for her Brexit strategy but which went badly wrong, costing her party its parliamentary majority and spawning a new debate about how to quit the EU.

On Thursday, May gave her ministers a sneak preview of the speech in her London office, hoping to reduce divisions among ministers who have been arguing over the nature of any transition agreement and how much to pay — a demand by the EU that some of her pro-Brexit lawmakers say is legally baseless.

Those present at Thursday's preview included Foreign Minister Boris Johnson, one of Britain's most high-profile pro-Brexit politicians and a one-time leadership contender.

Days earlier Johnson had stoked tension by laying out his own Brexit vision, challenging May's more cautious approach.

"The view among hardcore Brexiters in parliament … is that somehow we've allowed Brexit to go sour," said a Conservative Party source who asked not to be named.