British Prime Minister Theresa May gives her landmark Brexit speech in Complesso Santa Maria Novella on September 22, 2017 in Florence, Italy | Jeff J Mitchell/Getty Images | Jeff J. Mitchell/Getty Images Theresa May: UK to follow EU rules for 2 years after Brexit EU verdict on British prime minister’s Florence speech: Good but not nearly enough.

FLORENCE, Italy — The U.K. wants to continue operating under EU single market rules for at least two years after Brexit, during which time it will pay its EU budget commitments and allow freedom of movement to continue, Theresa May said in a landmark Brexit speech Friday.

Her position means the U.K. will stay inside the single market in all but name during a transition period, though without any say over its rules. Such an interim arrangement could last two years, May said, but she did not rule out a longer transition if one was needed. A two-year transition would mean few tangible changes as a result of Brexit until 2021 — five years after the referendum.

While the EU's chief Brexit negotiator and other senior officials welcomed May's speech as a signal of her willingness to move forward in a constructive fashion, they strongly criticized her for not providing sufficient clarity on the three main divorce issues: citizens' rights, the financial settlement and Ireland.

Seeking to clarify some of the contradictions inherent in the U.K.’s Brexit position, and to reassure the EU that the U.K. wants a mutually beneficial deal, May said the “implementation period” was necessary and that “people and businesses — both in the U.K. and in the EU — would benefit from a period to adjust to the new arrangements in a smooth and orderly way.”

“Businesses and public services should only have to plan for one set of changes in the relationship between the U.K. and the EU,” she said.

In a bid to break deadlock in the Brexit negotiation, which have stalled over the question of the divorce bill, May made clear that the U.K. would meet its budget commitments made as a member — a reference to the Multiannual Financial Framework (MFF) budget plan, which runs till the end of 2020, meaning the U.K. would continue paying contributions during its transition. U.K. officials said this covers around €20 billion of Britain’s financial obligations.

“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. The U.K. will honor commitments we have made during the period of our membership” she said.

May said the U.K. would also pay the cost of remaining in certain EU programs after Brexit. Other financial obligations, such as pensions payments, remained a matter for negotiation, U.K. officials said.

During the transition, trading between the U.K. and EU single market “should continue on current terms,” May said, conceding that this would mean the “framework” for the trading relationship being “the existing structure of EU rules and regulations.”

The proposal goes further than Britain's previous stance and brings the government's position close to that demanded by the opposition Labour Party and by British businesses.

This will see the U.K. allow the continuation of freedom of movement during a transition — something that had previously been a red line for May. The U.K. will require EU citizens coming to work in the U.K. during the transition to register with British authorities, but officials characterized this as within EU rules and similar to measures already taken by other countries such as Belgium.

Britain would use the transition to finalize terms of its new, long-term relationship with the EU, May said.

EU reaction

In the EU’s official response, chief negotiator Michel Barnier described May’s speech as a welcome expression of a “willingness to move forward” but called for more clarity on virtually every point.

"Prime Minister May's statements are a step forward but they must now be translated into a precise negotiating position of the U.K. government,” he said, referring to May saying that EU citizens in Britain would have their rights protected because ECJ rulings would be absorbed into U.K. law and U.K. courts could continue to take ECJ rulings into account after Brexit.

On the Irish border, he said the speech “does not clarify how the U.K. intends to honor its special responsibility for the consequences of its withdrawal for Ireland.”

And on the financial settlement, Barnier said it was far from certain that her offer to keep the EU’s current budget plan whole would be sufficient for the U.K. to meet all of its financial obligations as it leaves the EU.

“We look forward to the United Kingdom’s negotiators explaining the concrete implications of Prime Minister Theresa May’s speech," Barnier said.

The Frenchman also flashed warning signs over May's request for a transition period, noting the U.K. would lose its voting rights and decision-making power as a member, but would still be required to obey EU law and meet all other obligations of membership in its single market.

“The fact that the government of the United Kingdom recognizes that leaving the European Union means that it cannot keep all the benefits of membership with fewer obligations than the other member states is welcome,” Barnier said, adding: “The EU will continue to insist on sufficient progress in the key areas of the orderly withdrawal of the United Kingdom before opening discussions on the future relationship. Agreeing on the essential principles in these areas will create the trust that is needed for us to build a future relationship together.”

Italian Prime Minister Paolo Gentiloni echoed Barnier’s remarks.

Gentiloni — who sent a pointed message by not attending the speech even though it was in Italy — called May’s address “constructive.”

“Now time to put these to the test at the negotiations with the EU,” the Italian prime minister tweeted.

Other EU officials reacted coolly to May's speech.

Poland's EU affairs minister, Konrad Szymanski, said in a statement that the financial settlement remained “the real problematic issue that remains to be resolved” and that the EU would agree to talk about a transitional period with the U.K. “only if that could lead to complete fulfillment of U.K.’s commitments.”

“Membership of the U.K. in the single market as well as the customs union translates into regulatory and financial obligations of the U.K. towards the EU,” Szymanski said.

In the European Parliament, which holds veto power over any withdrawal agreement with the U.K., there was little cheering.

Manfred Weber, leader of the European People's Party group, criticized May’s speech and said it would only make the Brexit process harder. “In substance PM May is bringing no more clarity to London's positions,” Weber tweeted. “I am even more concerned now.”

Guy Verhofstadt, the Parliament's Brexit coordinator, said the U.K's proposals for a registration system for EU citizens who want to live in the U.K. was "out of the question."

"Theresa May sounds like Donald Trump," said Jo Leinen, a German Socialist MEP and member of the European Parliament's Constitutional Affairs Committee. "May puts national selfishness over jointly agreed decisions in the EU.”

Senior diplomats working on Brexit had a previously scheduled meeting at the European Council on Friday afternoon, giving them a convenient opportunity to confer about May's speech. They seemed mostly unimpressed.

“Mostly wordy or unclear,” one senior diplomat told POLITICO. “First and foremost, it now remains to be translated into action by negotiators on Monday. We don’t negotiate on the basis of a speech.”

Another diplomat said May appeared to have a fundamental misreading of EU sentiment going forward. “She talks about EU and U.K. as if we are two equal countries wanting a relationship,” the diplomat said. “That’s fundamentally getting it wrong. They are leaving the EU. They are 60 million. We are 450."

Praise from business

The speech was received warmly by the British business lobby who said their voice had been heard. When in July the Confederation of British Industry called for the U.K. to stay in the single market and the customs union for as long as it took to agree a new U.K.-EU relationship, it seemed like an unlikely scenario.

Now, with May noncommittal about the length of a transition, and proposing something that, while not strictly single market or customs union membership, looks almost exactly the same, the CBI said it felt vindicated.

“The prime minister’s speech has set a positive tone and we now need leadership from both sides to turn the proposals and principles into decisions and action," said CBI Director General Carolyn Fairbairn.

The opposition Labour Party, which in August shifted its position to call for continued single market and customs union membership during a transition, also claimed a victory.

Leader Jeremy Corbyn said May had “listened to Labour and faced up to the reality that Britain needs a transition on the same basic terms to provide stability for businesses and workers.”

After weeks of clashes within her Cabinet over the nature of the future relationship, May ruled out two opposing “off the shelf” models — European Economic Area membership, and a trade deal along the lines the EU has agreed with Canada. She said long-term EEA membership — the Norway model, under which the U.K would be in the single market but with no say over EU rules — would represent a “loss of democratic control” that “could not work for the British people.” On the Canada model, she said the U.K.’s existing regulatory harmony with the EU meant that the two sides could “do so much better” with a deeper, more comprehensive free - trade agreement.

On the rights of EU citizens already in the U.K. and British citizens on the Continent, May reiterated her position that the U.K. would enshrine its agreement with the EU into U.K. law, and that British courts could continue to “take into account” new judgments by the European Court of Justice on questions of rights after Brexit. However, British courts would not be bound to doing so, U.K. officials said.

The speech sought to reassure the EU that the U.K. would not be a rival or seek to undercut the single market by creating a low tax, low regulation, Singapore-style economy. There were no threats, as in May’s January Lancaster House speech, to change the U.K.’s economic model if access to the single market were denied.

But reflecting on the U.K.’s place in Europe, May said the U.K. had “never totally felt at home” in the EU and portrayed the Brexit vote as a choice to bring democratic control closer to home.

“Perhaps because of our history and geography, the European Union never felt to us like an integral part of our national story in the way it does to so many elsewhere in Europe,” she said.

“It is a matter of choices. The profound pooling of sovereignty that is a crucial feature of the European Union permits unprecedentedly deep cooperation, which brings benefits.”