Austria's Kurz wants to help EU's Barnier avoid a hard Brexit

BERLIN (Reuters) - Austrian Chancellor Sebastian Kurz, whose country holds the rotating European Union presidency, said on Thursday he wanted to help the EU's chief Brexit negotiator avoid a hard Brexit.

With little more than seven months to go until it leaves the EU on March 29, Britain has yet to reach an agreement with the bloc on the terms of its departure. Prime Minister Theresa May's plan for a "business-friendly" deal has failed to impress negotiators in Brussels and has been heavily criticised at home.

Austria will host a meeting of EU leaders in Salzburg on Sept. 20 with time pressing to clinch a deal to prevent Britain crashing out of the bloc that its people voted to leave in 2016.

"It was probably the worst decision of recent years - Britain's decision to leave the European Union," Kurz told a rally of German Chancellor Angela Merkel's conservatives in Erfurt to applause. "But the decision was taken and now it is about ensuring that contact remains good."

"Britain is militarily, politically and economically tremendously significant on our continent," he said, adding that securing a good relationship was important to prevent further Brexit fallout for both Britain and the EU.

"Our big goal is to make a contribution during the presidency so that our chief negotiator, Michel Barnier, can continue to successfully lead the member states together, so that we can bring about a deal with Britain to avoid a hard Brexit and to secure an orderly future together," Kurz said.

Britain on Thursday told companies trading with the European Union they would face a tangle of red tape, possible border delays and more costly credit card payments if the government fails to negotiate an exit deal before Britain leaves the bloc.

After more than 40 years in the EU, Britain is having to set out its plans for every aspect of life.

Barnier said on Tuesday a deal with Britain was needed "not much later" than in early November and that the bloc was not working towards a "no-deal" Brexit, though it had to prepare for it.

(Reporting by Paul Carrel; editing by Andrew Roche and Toby Chopra)