May hosts EU leaders as Brexit positions harden

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Wednesday's meeting will be the first between May and Juncker since the British leader triggered Article 50 of the EU's Lisbon Treaty, launching two-year divorce proceedings

British Prime Minister Theresa May on Wednesday holds her first talks with key EU Brexit negotiators, as the bloc hardens its position ahead of a summit to lay down its "red lines".

May hosts European Commission President Jean-Claude Juncker and chief negotiator Michel Barnier at Downing Street for the first face-to-face talks since she triggered the two-year process of withdrawing from the European Union.

The encounter over dinner comes as the EU has toughened its strategy, making new demands over financial services, immigration and the bills Britain must settle before ending its 44-year-old membership in the bloc.

The latest draft negotiating guidelines, agreed on Monday by Barnier and European diplomats, point to months of difficult talks ahead as the EU seeks to ensure Britain does not get a better deal outside the bloc than inside.

According to the document, seen by AFP, the other 27 EU countries will seek to hold Britain liable for the bloc's costs for at least a year after it leaves in 2019 -- longer than was previously proposed.

Britain will also be required to give EU citizens permanent residency after living there for five years, in a challenge for May's Conservative government, which has vowed to limit immigration.

And the guidelines recommend that Britain's dominant finance industry will not necessarily be tied to any future trade deal with the EU and that it must also stick to the bloc's rules if it wants easy access to EU markets.

May has committed to pulling Britain out of Europe's single market to end free movement of EU citizens into Britain, but says she wants to form a new partnership with the bloc.

"We will have difficult issues to confront. Compromises will be necessary on both sides. We know all this," Brexit minister David Davis said in a speech in London on Wednesday.

But he added: "The UK has a very good reason to feel optimistic."

- 'Great goodwill' -

After starting the Article 50 process of leaving the EU last month, May is seeking to shore up her mandate for the Brexit talks in a snap election on June 8, with polls suggesting her Conservatives will return with an increased majority.

In recent weeks, she has held talks with senior EU figures, including European Parliament President Antonio Tajani and European Council chief Donald Tusk, who visited Downing Street on April 6.

Her spokesman said the visits show that Britain "will be approaching the negotiations in a constructive manner and with great goodwill".

But EU Commissioner Elzbieta Bienkowska warned in an interview with Germany's Die Welt newspaper that Britain "can't have everything in the end. They can't have their cake and eat it".

The leaders of the other 27 EU nations will meet on April 29 to set down the bloc's red lines, though the talks will not begin until June.

Nina Schick, associate director at advisory firm Hanbury Strategy, told AFP there was in a sense in Britain of "at best optimism, at worst just not understanding where the EU side is coming from".

Schick, who works with the Open Europe initiative, said that the tougher guidelines "are not really a surprise" and that both sides were likely to "reiterate their positions" at the Downing Street talks.