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Lion’s den or nest of doves? U.K.’s May arrives in Brussels with a ‘very clear message’

Jack Taylor | Getty Images

Prime Minister Theresa May has arrived at her first European Union summit with a "very clear message" for her fellow leaders: Britain is leaving the EU but we'll still help out while we're here.

"The U.K. is leaving the EU, but we will continue to play a full role until we leave and we will be a strong and dependable partner after we have left," May told journalists in Brussels as she arrived for her first European meeting.

"It's in the interests both the U.K. and the EU that we continue to work closely together, including at this summit. We must show a robust and united European stance in the face of Russian aggression," May added.

The 28 leaders are gathering in the Belgian capital for two days. They will mainly discuss how to deal with the Russian involvement in Syria, how to ensure that a trade deal with Canada receives full backing across the union, and will, once again, assess the state of the refugee crisis.

May will brief her EU counterparts Thursday night on her views on Brexit, but there will not be any discussions on the future relationship between the EU and the U.K.

"We expect PM May to intervene shortly during the dinner to present her views on Brexit," an EU official told CNBC in an email.

"No debate expected."

German Chancellor Angela Merkel (C), French President Francois Hollande (L) and European Commission President Jean-Claude Juncker.
Sean Gallup | Getty Images

The remaining 27 leaders keep their stance that until the U.K. formally triggers Article 50, which kick-starts the Brexit process, they will not start negotiating how the U.K. and the EU will work in the future.

However, May is meeting President Jean-Claude Juncker on Friday. Mina Andreeva, deputy chief spokesperson of the European Commission told reporters at a press briefing Thursday that this would be a "good opportunity to have a face to face introductory meeting since she has taken up office as prime minister."

President Donald Tusk of the European Council said some media reports describing May's first EU summit as entering the lion's den were not correct.

"It is more like a nest of doves," Tusk said as he entered the meeting. "You can be sure she will be absolutely safe with us. I hope she will also realize that the EU is still the best company in the world."

Brexit isn't correctly priced in

Markets have been volatile over comments on how the U.K. government intends to proceed with Brexit. Sterling has fallen 17 percent since the EU referendum took place on June 23 and this month reached a 31-year-low on comments from the French president that Britain would have to suffer for its decision to leave the EU.

Brexit is "generally, not yet correctly priced," Alastair Winter, chief economist at Daniel Stewart told CNBC in an email.

"The pound looks oversold and some non-domestic stocks overbought. Some domestic U.K. stocks are either oversold or irrationally volatile (e.g. house builders)," Winter added.

Prime Minister May said that the U.K. would start official negotiations with the EU no later than March of next year, which according to Michael van Dulken, head of research at Accendo, is the main reason why markets are not correctly pricing in Brexit.

"Perhaps it is too early to see if we will be able to trigger Article 50 by March," he told CNBC over the phone.

"It is an incredibly complicated situation."

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