Brexit: Germany rules out 'informal' deal with UK over EU referendum

Chancellor Angela Merkel expresses fear that investors may now believe the EU is ungovernable, sources claim

Ian Johnston
Monday 27 June 2016 17:06 BST
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Angela Merkel wants to stick to the formal process as the UK negotiates Brexit
Angela Merkel wants to stick to the formal process as the UK negotiates Brexit

Germany has ruled out informal Brexit talks between the UK and rest of the European Union, a spokesman for Chancellor Angela Merkel has said as sources claimed she feared investors believed the EU was no longer governable.

The spokesman told a news conference there would be no "preliminary talks” about how the UK would leave the EU before the UK begins the formal process, which has a two-year time limit.

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He was speaking as British politicians – who had been on both sides of the Brexit debate – sought to calm nerves as the pound hit a 31-year low against the dollar.

A state that wishes to leave must send a formal notice under Article 50 of the Lisbon Treaty, which sets out the broad mechanism.

As the referendum was not binding, lawyers have said the UK parliament must vote to repeal the 1972 European Communities Act before Britain can leave.

What is Article 50?

Writing in the Daily Telegraph, Boris Johnson, the favourite to replace David Cameron as Prime Minister, said there was “no rush” to make the change.

But Steffen Seibert, spokesman for Chancellor Angela Merkel, said delaying the Article 50 notification meant there would be no talks about how Brexit would happen.

“One thing is clear: before Britain has sent this request there will be no informal preliminary talks about the modalities of leaving,” he said.

“Only when Britain has made the request according to Article 50 will the European Council draw up guidelines in consensus for an exit agreement.”

Ms Merkel also told the board of her Christian Democratic Union party that international financial markets were very concerned that the European Union is no longer governable following the Brexit vote, two participants in a conference call on Monday said.

She also said it was necessary to take steps to prevent other countries from leaving.

On Sunday, Ms Merkel's chief of staff, Peter Altmaier told the RND newspaper network that Britain's politicians "should have the possibility to reconsider the consequences of an exit", adding that this would be a "difficult watershed with many consequences".

Speaking on ITV's Good Morning Britain, Eurosceptic Tory MP Chris Grayling, the Leader of the House of Commons, echoed Mr Johnson’s suggestion that the UK would not be leaving the EU any time soon.

“The most important thing right now is that we settle back into a period of stability,” he said.

“There's going to be a lengthy process now. First of all an informal process, as the chancellor [George Osborne] said, while we prepare our strategy, what we actually want to negotiate with our European partners, and then a formal process whereby we go through that process of negotiation.

“What we don’t need right now is a country that believes that things are about to change dramatically and radically, where businesses take fright and the markets take fright.

“I think it’s very important to send a message that says we're going to do this very carefully, we're going to do this very steadily. Britain isn't going to become an inward-facing country that's not a good international citizen.”

In his resignation speech, Mr Cameron said he would not trigger Article 50 but allow his successor to decide on its timing.

Mr Osborne, in an early morning speech on Monday designed to calm investors before the start of trading, said he had been in touch with “fellow European finance ministers” and others “so that collectively we keep a close eye on developments” as the full impact of the Brexit vote plays out in the markets.

“It will not be plain sailing in the days ahead,” he cautioned.

Mr Osborne said one of the “challenges” the UK now faced was to “agree a long-term economic relationship with the rest of Europe that provided for the best possible terms of trade in goods and services”.

“Together, my colleagues in the government, the Conservative Party and in Parliament will have to determine what those terms should be – and we’ll have to negotiate with our European friends to agree them,” Mr Osborne said.

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