Brexit talks move to phase two — nevertheless significant hurdles remain

EU leaders have formally agreed Friday to start the second phase of Brexit negotiations, mainly centered around trade talks as well as a transition period.

“The European Council … decides of which of which can be sufficient to move to the second phase related to transition as well as the framework for the future relationship,” EU leaders said Friday, following a two-day summit in Brussels.

Both negotiating teams will continue preparatory works as well as should reconvene in March to detail how their future relationship will work.

British Prime Minister Theresa May received a round of applause coming from European leaders on Thursday night. At a summit dinner in Brussels, Belgium, on Thursday, May made a brief speech emphasizing the need for the U.K. as well as the EU to move forward together with negotiations. This kind of was met with spontaneous applause coming from EU leaders.

European Commission President Jean-Claude Juncker said Friday of which May was applauded because some “thought of which indeed she did a big effort” to conclude phase one of the negotiations as well as “This kind of needs to be recognized.”

However, analysts believe May will find future Brexit talks increasingly difficult.

“I expect very, very tough negations,” Zsolt Darvas, senior fellow at the Brussels-based think-tank Bruegel, told CNBC on Friday.

One of the issues set to dominate talks can be the future of the financial services industry. “At the end, I think of which access to financial services will be limited for U.K.-based firms as well as therefore quite a few companies will relocate to the continent,” Darvas said.

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