* Verhofstadt quips about May and betrayal in British politics
* Verhofstadt says assumes a Brexit deal can be done
* Euro zone needs own fiscal capacity, finance minister (Recasts headline, adds quotes on Brexit deal)
By Polina Ivanova
LONDON, Sept 28 (Reuters) - The lead Brexit negotiator for the European Parliament poked fun at British Prime Minister Theresa May on Thursday, quipping that she gave her Brexit speech in Florence because she was familiar with the city’s 15th century politics of betrayal.
In a speech to students at the London School of Economics, Guy Verhofstadt said Brexit was negative and a waste of time and energy, though he also said Britain’s decision to leave the bloc was a failure for the European Union.
“I think she chose Florence because Florentine politics in the 15th century made her feel at home,” Verhofstadt said with a smile. “Backstabbing, betrayal, noble families fighting for power... It is an environment that she recognized fairly well.”
He said the one positive outcome of Brexit was that the mood in the EU had reversed since Britain’s vote to leave in June 2016 and that now many EU citizens did not want to destroy the Union.
After May formally notified the EU in March of Britain’s intention to leave the EU, the two sides have about a year left to negotiate the terms of the divorce and the outlines of the future relationship before it is due to leave in March 2019.
Both sides need an agreement to keep trade flowing between the world’s biggest trading bloc and the fifth largest global economy, though some chief executives and diplomats fear what they term a disorderly Brexit without a deal.
May had hoped that a speech she made in Florence on Friday would unblock the three-month-old talks and pave the way for the EU to open discussions on a post-Brexit free trade deal.
The EU and Britain made progress in the latest round of divorce talks, but not enough to move to the next phase of discussions on a transition period after Brexit or a future trade deal, top negotiators said on Thursday.
When Verhofstadt was asked whether he thought a deal could ultimately be done on Brexit, he said: “That’s the assumption that I have and it is towards that that we work.”
“And that a withdrawal agreement be done in March 2019 means that there has to be an agreement in fact in October or November because then the agreement will go to the European Parliament and we need four or five months,” he said.
After what he termed the ‘failure’ of Brexit, Verhofstadt said the EU needed a major overhaul to give the euro zone a government with its own fiscal capacity and its own treasury and finance minister.
“We need a management or government of this euro zone with a fiscal capacity, that is in my view the most important. And with a fiscal capacity, normally, you can also give out loans,” he said, adding that some type of euro securities could be issued at some point in the future. (Editing by Guy Faulconbridge)