The Latest: Merkel calls UK's residency stance 'good start'

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The Latest on the European Union summit (all times local):

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11:20 p.m.

German Chancellor Angela Merkel says Britain's promise to grant full rights to EU citizens who have been living in Britain for five years a "a good start" to Brexit talks.

Merkel said at the end of the first day of a two-day EU leaders summit that British Prime Minister Theresa May "said clearly" to her peers that EU citizens who have been living in the U.K. that long "will be able to hold on to full rights" once Britain leaves the bloc.

Merkel said: "That is a good start."

But Merkel cautioned that the two years of Brexit negotiations that started this week involve "many, many other issues."

She specifically cited the bill Britain will have to pay to leave and the border situation in Ireland as examples.

Merkel said, "It means we have lots left to do."


11:05 p.m.

The 27 European Union nations that will still be part of the bloc when Britain pulls out plan to decide in November where the EU agencies now based in London will be relocated.

EU Chief Donald Tusk laid out the timetable during a summit of EU nation leaders on Thursday.

Because Britain is set to leave the EU in 2019, the medicines and banking agencies will have to move from London to elsewhere on the continent.

Almost every EU nation wants one of the two agencies and on Thursday the leaders agreed on procedures for a fair pick.

Germany and France are favorites to get one of the agencies.


10:50 p.m.

British Prime Minister Theresa May is laying out her promises for European Union citizens living in Britain once it leaves the bloc.

A senior British official said Thursday that May told other EU leaders at a summit Thursday that EU citizens living legally in Britain will not be forced to leave when Brexit is official, and they will be allowed to apply for permanent residency.

May said any EU citizen with five years' residence in the U.K. will obtain "settled status" and the same access to health care, education, benefits and pensions as British citizens, according to the official.

The official said Britain is discussing a grace period of up to two years to allow people to apply for residency. The official was not authorized to be publicly named discussing May's private dinner meeting

— By Raf Casert.


10:10 p.m.

British Prime minister Theresa May sought to reassure EU leaders that their 3 million citizens living in the U.K. will be get a fair deal as part of the nation's departure from the bloc.

May said during a dinner with other EU leaders Thursday night that the rights of European citizens would be a priority issue during the Brexit negotiations which kicked off on Monday.

She said she would be insisting on a reciprocal deal from the European Union for the 1.5 million British citizens living abroad on the continent.


7:45 p.m.

Weeks after being berated by U.S. President Donald Trump for failing to spend enough on defense, European nations are vowing to boost military cooperation and help build a safer world in their neighborhood.

At a summit in Brussels on Thursday, European Union leaders — 22 of whose nations are also members of the U.S.-led NATO alliance — agreed to jointly develop or purchase military equipment like drones.

They said "The objective is to deliver capabilities, ensure a competitive, innovative and balanced basis for Europe's defense industry across the EU."

EU countries will also draw up a list of criteria and binding commitments over the next three months for setting their cooperation in stone, rather than rely on the vaguer promises of the past. The leaders also agreed to use EU funds to finance Europe's battlegroups - small, expeditionary forces that can rapidly be deployed to crisis hotspots.


8:05 p.m.

The leaders of European Union nations have agreed to extend sanctions against Russia over its actions in Ukraine, following a similar move by the United States this week.

European Council president Donald Tusk tweeted Thursday while hosting an EU summit in Brussels: "Agreed. EU will extend economic sanctions against Russia" over its failure to implement measures promised in a peace agreement.

After Thursday's political decision, the sanctions will be formally extended for another six months starting next week.

The EU initially imposed sanctions on Russia three years ago after it annexed Crimea. It has repeatedly extended them as the conflict between Ukraine's government and pro-Russia separatists has dragged on.

European Union leaders have long been torn whether to open more diplomatic contacts with Moscow in parallel with the sanctions.


7:20 p.m.

German Chancellor Angela Merkel says she'd like to see the maximum possible guarantees for European Union citizens living in Britain but is leaving the details to the EU's Brexit negotiating team.

British Prime Minister Theresa May said going into an EU summit starting Thursday that she will set out how she proposes to protect the rights of EU citizens in Britain while looking for similar protection for Britons living elsewhere in the bloc.

Merkel told reporters in Brussels on Thursday: "as a tendency, I am for security guarantees that go as far as possible for EU citizens."

She said anything that gives a "high degree of security" to those who live in Britain or want to do so in the future "is of course of great use." But she stressed that the EU's chief negotiator, Michel Barnier, is in charge of the talks.

Britain is leaving the 28-nation bloc and the two sides are negotiating the best way to do that.


7 p.m.

German Chancellor Angela Merkel is supporting French President Emmanuel Macron in his criticism of eastern European countries, stressing that "we are a community of values."

Macron warned countries ahead of a European Union summit Thursday against defying Europe's principles and values as some eastern nations challenge the bloc's refugee-sharing plan.

Merkel told reporters in Brussels: "I think it is important that Emmanuel Macron stressed this again, because it shows France and Germany are taking entirely the same approach."

She added that it's important to talk to European colleagues "if there are difficulties."

Merkel said: "This is not the day for threats. But we have to speak constantly, and I think we must be able to say so if we do not agree with certain developments."


6:00 p.m.

European Union chief Donald Tusk says 27 European nations are poised to approve a procedure to share Europe-wide agencies currently based in Britain after it leaves the bloc.

At an EU summit Thursday in Brussels on Thursday, Tusk said, "My goal for tonight is that 27 EU leaders endorse the procedure for choosing new locations for the two UK-based agencies."

Many cities are vying to host the European Banking Authority and European Medicines Agency after Britain's departure from the EU.

EU officials have said top diplomats are closing in on a deal for where the two EU agencies from Britain would have to move once the UK leaves the EU.

Tusk indicated that after weeks of negotiations, a decision on the procedure was close at hand but the final decision on the cities isn't expected until later this year.


5:50 p.m.

The chairman of an EU summit says European leaders have agreed to crack down on online extremism and deepen efforts against European fighters joining extremists abroad.

EU Council president Donald Tusk said the leaders meeting in Brussels on Thursday also agreed to greater defense cooperation.

After a string of small-scale attacks this week on European capitals, Tusk said "terrorism is still a major threat."

European Union leaders are gathering Thursday to weigh measures to tackle terrorism, closer defense ties and migration.


4:20 p.m.

The Hungarian prime minister is not among those infatuated by France's new centrist president, Emmanuel Macron.

Hungary's populist Prime Minister Viktor Orban, annoyed because he felt Macron had slighted Central European nations in an interview, noted that the meeting Thursday in Brussels was Macron's first EU summit.

Macron said the European Union should not be used as a "supermarket" by countries who want to get a maximum out of it without showing sufficient solidarity on pressing issues like migration.

Orban says "there are quite a few veterans here who have been laboring for decades."

Orban says Macron's "entrance was not very encouraging, because yesterday he thought that the best form of friendship was to kick the Central European countries. That's not the norm here."


3:30 p.m.

French President Emmanuel Macron says that France and Germany will work together to relaunch the European Union project, amid divisions over how to manage refugees and as Britain prepares to leave.

Macron said Thursday that "Europe is not, to my mind, just an idea. It's a project, an ambition."

He said that "we are working hand in hand with Germany" and that the two countries, the historic twin-driving motors of European integration, plan "to speak with one voice."

His remarks came as he arrived for an EU summit in Brussels — his first ever. The leaders are due to discuss counter-terrorism, closer European defense cooperation and migration.


3:15 p.m.

John Lennon is turning into a factor at the European Union summit when his famous prose from "Imagine" is turning into a war of words about Brexit negotiations.

First, European Council President Donald Tusk said that "You may say I am a dreamer but I'm not the only one" when it came to still holding hopes that Britain could stay.

Belgian Prime Minister Charles Michel then had his quick retort. He said: "I am not a dreamer. And I am not the only one." Michel insisted the British people had chosen to leave and negotiations should now proceed apace.

He added that "What we also need is certainty, for our companies in Belgium, in Europe."

"If we back this image that Brexit perhaps would not happen, it brings an uncertainty."


3 p.m.

German Chancellor Angela Merkel has said as she arrived at a summit of European Union leaders that shaping the future of the EU should take priority over Brexit negotiations.

Merkel said in Brussels on Thursday that the Brexit talks will be conducted quickly and "we will do everything to continue succeeding, as we have so far, in keeping the 27 member states together."

She added: "We want to conduct these negotiations in such a way that they take place in a good spirit, and we know that we want to continue working afterward with Britain."

But Merkel said that "for me, shaping the future of the 27 member states has priority over the question of the negotiations with Britain on its exit."

Brexit negotiations started Monday.


2:45 p.m.

British Prime Minister Theresa May says that the negotiations to withdraw from the European Union have "started constructively."

She says that she will set out how she will protect the rights of EU citizens in Britain while looking for similar protection for Britons living elsewhere in the bloc.

May said "that has been an important issue."

May will discuss the matter at the summit's evening session. Afterward, the 27 other leaders will meet without May to assess the issue themselves.


2:10 p.m.

Belgian Prime Minister Charles Michel has immediately countered the suggestion of European Council President Donald Tusk that the door for Britain to stay in the EU is still slightly ajar.

And he took exception to Tusk's parallel that the EU, too, "was built on dreams that seemed impossible to achieve."

Michel wrote in a Twitter message : "It's time for action and certainty. Not for dreams and uncertainty #Brexit."

Tusk made the comments a few hours before a bilateral meeting with British Prime Minister Theresa May, quoting John Lennon's song "Imagine": "So who knows? You may say I am a dreamer but I'm not the only one."


1:10 p.m.

The spokesman for Poland's president has reacted to criticism by French President Emmanuel Macron, saying the funding that the European Union gives Poland does not oblige Warsaw to accept a quota of refugees under an EU plan.

Krzysztof Lapinski reacted Thursday to criticism by Macron who said in an interview with newspapers including Poland's Gazeta Wyborcza daily that East European leaders are betraying Europe's values but want its funds, adding: "Europe is not a supermarket. Europe is a common destiny."

Macron identified no countries, but EU leaders are criticizing Poland and Hungary in particular for their refusal to accept migrants.

Lapinski, who is spokesman for President Andrzej Duda, retorted that he agreed "Europe is not a supermarket" — and that means the EU should not expect Poland to accept the migrants just because it gives the country structural funds.


12:30 p.m.

British Prime Minster Theresa May is set to fly to Brussels to try to break the impasse in Brexit negotiations over the status of expatriate citizens after Britain leaves the bloc.

May will attend a European Council summit Thursday to speak to her European counterparts about her plans for the 3 million EU nationals living in Britain — an issue she says is her first priority for early agreement in the Brexit talks.

Her office at Downing Street declined to reveal details about the proposals on citizens' rights. But Foreign Secretary Boris Johnson said he hoped leaders of the other 27 EU nations would offer "reciprocal, corresponding generosity" for the 1 million Britons living in Europe.

May is going to Brussels for her first European summit since losing her Parliament majority in the election earlier this month.


11:20 a.m.

European Council President Donald Tusk says that he still holds out hope that Brexit can be reversed even though the negotiations on Britain's departure from the European Union officially started this week.

Tusk has made the comments a few hours before a bilateral meeting with British Prime Minister Theresa May. Tusk says that he had been asked by British friends if he could see a way of Britain still staying in.

Tusk said that "I told them that in fact the EU was built on dreams that seemed impossible to achieve."

He added to that by quoting a John Lennon song: "So who knows? You may say I am a dreamer but I'm not the only one."


10 a.m.

European Union leaders are gathering to weigh measures to tackle terrorism, closer defense ties and migration, convinced that anti-EU sentiment and support for populist parties are waning.

Before the two-day meeting in Brussels starting Thursday, summit chairman Donald Tusk trumpeted the resurgence of the EU, even as Britain launched talks this week on leaving.

Tusk told the leaders in an invitation letter that after a series of election defeats for anti-migrant parties, notably in France, the EU is "slowly turning the corner."

He said "we are witnessing the return of the EU rather as a solution, not a problem."

British Prime Minister Theresa May is due to praise the good atmosphere at Monday's Brexit talks, and explain how to protect the rights of citizens hit by Britain's departure.