Angela Merkel has toughened her stance on Britain’s future access to the single market, saying no exceptions can be made after the country leaves the European Union.
The German Chancellor said Britain can only keep full access to the trading bloc by continuing to allow free movement of people.
“If we don't say that full access to the single market is linked to full acceptance of freedom of movement, then everyone in Europe will start doing what they want,” Ms Merkel told an industry event in Berlin on Thursday.
She added that negotiations between the EU and Britain won't be easy and said they will need to make clear what access each side has to the other side's market.
Ms Merkel’s response follows Theresa May’s announcement on Sunday in which she said Britain would invoke Article 50 by the end of March 2017, triggering the formal negotiations for Britain's exit of the EU.
Ms May also signalled she is prepared to prioritise immigration controls over single market access.
Britain’s wait before beginning Brexit negotiations has been interpreted in Europe as a “preparation for battle”.
But Ms Merkel said no exception to the EU’s four freedoms, which include free movement of people, goods capital and services, can be made.
Any deviation from these principles would represent “a systematic challenge for the entire European Union”, she said.
In a speech to German exporters on Wednesday, Ms Merkel said Britain can't have both things.
If one country was allowed to choose which elements to adhere to, “you can imagine how all countries will put conditions on free movement with other countries. And that would create an extremely difficult situation.” she said.
France’s finance minister Michel Sapin said the UK’s long wait before triggering Article 50 was a sign the British government was preparing for tough negotiations that could risk a “hard Brexit” not in Britain’s interests.
He told Reuters: “It (Britain) has given itself time to prepare for battle, but it would be best to not consider that there is a battle.”
“A battle is not in Britain's interest,” he said, adding that the 27 remaining members of the EU could be counted on to defend their interests in negotiations.
He added: “If there is a country that has something to lose from tough negotiations with dire consequences - what's called ‘hard Brexit’ - it's Britain.”
What experts have said about Brexit
What experts have said about Brexit
1/11 Chancellor of the Exchequer Philip Hammond
The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”
2/11 Yanis Varoufakis
Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”
3/11 Michael O’Leary
Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”
4/11 Tim Martin
JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"
5/11 Mark Carney
Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”
6/11 Christine Lagarde
IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”
7/11 Inga Beale
Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”
8/11 Colm Kelleher
President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”
9/11 Richard Branson
Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"
10/11 Barack Obama
US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"
11/11 Kristin Forbes
American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”
The French government has consistently demanded the UK makes a swift exit from the union following the referendum in June.
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