U.K. Must Pay for Market Access to Post-Brexit EU, says Merkel Ally

Britain’s prospects for a low-cost solution after its vote to exit the bloc were diminished after an ally of German Chancellor Angela Merkel said the U.K. will have to pay into the European Union’s budget if it wants the single market’s advantages.

The case of Norway, a non-EU nation that contributes to the bloc’s finances in return for market access was cited by Juergen Hardt, a lawmaker who speaks on foreign policy matters for Merkel’s Christian Democrat-led parliamentary caucus. He said that the U.K.’s campaign leading up to the Brexit referendum in June, had not adequately cover the issue.

“If someone wants to benefit from the European Union single-market structures, he also has to contribute to the cost of that operation. In Britain, before the referendum, nobody talked about that fact,” Hardt said in an interview in Berlin. Once U.K. Prime Minister Theresa May triggers the exit clause and talks on a new relationship begin, she won’t be allowed to pick and choose the EU’s benefits by Germany, Merkel and others in her government have repeatedly warned. The EU’s benefits come at a cost, added German Foreign Minister Frank-Walter Steinmeier.

“The U.K. can’t rid itself of the duties of an EU member and at the same time keep the rights of an EU member. We have to talk about this with great clarity on both sides of the English Channel,” Steinmeier said Tuesday at an event in Berlin.

Britain shouldn’t expect special treatment on a halt to immigration, Hardt said in the interview.

Hardt, 53, said on Monday: “there’s no possibility to, for example, abridge the free movement of employees but to keep all the other freedoms” that EU members share within the single market.

The U.K.’s financial industry would be deprived of so-called passporting rights that allow them direct access to clients in the EU by losing access to the EU’s single market and this is a threat to the industry. A key part of the negotiations is the future of the financial services.

Ahead of the first EU summit on Sept. 16 in Bratislava, Slovakia, Merkel is seeking to steer diplomacy without Britain. A German government official said on Tuesday that at the Group of 20 meeting in China this coming weekend, Brexit’s impact will also be discussed.

While differences over Europe’s biggest refugee crisis since World War II remain unresolved, greater cooperation on security and economic policy are among the topics for the Bratislava gathering. Hardt said that leaders are likely to fall short of a permanent solution with EU members such as Poland and Hungary rejecting a quota system for resettlement.

“I don’t expect a breakthrough of the refugee question,” he said.

He said that EU countries are more likely to consider a system that includes a voluntary cooperation for reluctant states even as a quota system would be the “gold standard.”

Hardt said that citizens first need to start “trusting” the EU again.

“Then we have to think about the new structures, and then we have to think about the negotiations with the British people,” Hardt added.

(Adapted from Bloomberg)

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