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Michel Barnier, EU's chief negotiator, has emphasised the need to be flexible while also warning that the "clock is ticking" if an agreement is to be reached by the time the United Kingdom is scheduled to leave at the end of March 2019. "It's vital. We are not making threats", he said.

The British government said Tuesday that it would continue its close cooperation with the European Union on security, months after suggesting security could be used as a bargaining chip in Brexit negotiations.

Juncker is expected to say that the European Union appears to have ridden out the tide of right-wing populism that resulted in the June 2016 Brexit vote and the election of US President Donald Trump last November.

Juncker said the meeting should be held March 30 in the city of Sibiu, a picturesque city in Transylvania that was settled centuries ago by ethnic Germans from Luxembourg, Juncker's home country.

And the Government suggested failure to agree a new trade deal would jeopardise the ability of the European Union to "access the best war-fighting capability to keep us safe".

While Juncker can expect a generally warm reception in the European Parliament, a broadly federalist body with the noisy exception of dedicated anti-EU parties, the test of whether his proposals translate into action will be the reactions in the coming months of national leaders in the 27 member states.

Keeping Britain "locked into [the] structures, policies and financial schemes of the new EU Defence Union" means passing "increasing amounts of control to the EU after 2017", in Veterans for Britain's estimation.

Meanwhile, Italy has handled an influx of migrants and refugees.

Time is running out for Juncker's plans, with 2018 being the last full year of his mandate.

"The wind is back in Europe's sail", he said in an upbeat hour-long annual "State of the European Union" address in Strasbourg, France.

'We want to fight terrorism together. After Japan on the trade front, Australia, New Zealand and South America are next in Brussels' sights for rapid new agreements.

"The EU is willing to establish partnerships with the United Kingdom in areas unrelated to trade, in particular the fight against terrorism and worldwide crime as well as security, defence and foreign policy", the European Commission's chief spokesman Margaritis Schinas told reporters.

And in apparent response to criticism that the bloc focuses on the most menial of issues, Juncker presented a commission with a whittled-down agenda, saying it proposed just 25 initiatives this year, down from 100 two years ago.