Merkel Tells Cameron Before EU Summit: Don’t Delude Yourself

Sony Kapoor: Merkel 'Pulled the Rug' From Leave Campaign
  • Two-day EU summit to consider first steps after U.K. vote
  • British influence in bloc has waned even before talks start

German Chancellor Angela Merkel warned the U.K. to have no illusions about life outside the European Union, hardening her stance ahead of Prime Minister David Cameron’s first meeting with fellow EU leaders since triggering the political earthquake that’s shaken the bloc’s foundations.

Merkel, in her toughest response yet to last week’s British vote to quit the 28-nation EU, said that the U.K. can’t expect favored treatment once it leaves and that there will be no informal talks on a new relationship before the government in London files its application for divorce.

Merkel speaks in Berlin on June 28.
Merkel speaks in Berlin on June 28.
Photographer: John MacDougall/AFP via Getty Images

“There shouldn’t be the slightest misunderstanding about the conditions laid out in the European treaties for a case like this,” Merkel said in a speech to Germany’s parliament in Berlin on Tuesday. “My only advice to our British friends is: Don’t delude yourself about the necessary decisions that need to be taken.”

Merkel won applause from German lawmakers as she laid out her approach to the two-day summit of EU leaders in Brussels that will be dominated by Brexit and the political and economic fallout reverberating across Europe. As she spoke, a taste of things to come was on show in the European Parliament, where United Kingdom Independence Party leader Nigel Farage clashed with European Commission President Jean-Claude Juncker.

“Why are you here?” Juncker demanded, as he turned to look at the leading “Leave” campaigner. Farage hailed the result of last week’s vote as “seismic,” saying the U.K. “will not be the last member state to leave the European Union.”

Cameron will endure an awkward dinner with his EU counterparts after his effort to calm the U.K.’s divided public and soothe investors failed to stop the pound and the country’s biggest banks from getting clobbered.

“I’ll be explaining that Britain will be leaving the European Union but I want that process to be as constructive as possible and I hope the outcome can be as constructive as possible because, of course, while we’re leaving the European Union, we mustn’t be turning our backs on Europe,” Cameron said as he arrived for the summit.

The premier has already announced he will quit after the vote, leaving him little leverage at the table, and back in London the race to succeed him is heating up. His government has signaled it prefers a gradual exit from the EU while the euro region’s three largest economies are keen to set a timetable to contain the economic damage.

“We will ensure the cherry-picking principle won’t apply in the negotiations,” Merkel said. “There must be -- and there will be -- a palpable difference between a country that wants to be part of the European Union and one that doesn’t.”

The EU gathering unfurls against a backdrop of market turmoil, with shares in Barclays Plc and Royal Bank of Scotland Group Plc crashing to their lowest level since the financial crisis. More than $4 trillion have been erased from global equity values in the aftermath of the June 23 plebiscite as the pound extended its record selloff.

The selloff was halted Tuesday, with stocks and sterling gaining. The pound was up 1.4 percent as of 1:48 p.m. in London.

Reeling from the referendum outcome, EU leaders are split on how hard to come down on the U.K. In the meantime, Britons have lost any influence they had in the bloc while remaining bound by its rules and membership fees for at least two years.

“The rest of the EU feel they bent over backwards to accommodate Cameron over the last months and he launched this reckless referendum and lost it, so the other EU states are in no mood to do him any favors,” said Mark Leonard, director of the European Council on Foreign Relations. “We don’t know how long he is going to be prime minister for, when a new government could begin to negotiate terms.”

Political Impasse

For now, the U.K. is stuck in a political impasse. Cameron’s Conservative Party said Monday a new leader should be in place by Sept. 2. Some in the EU are holding out hope that if the U.K. waits a long time to activate the exit trigger, the decision to leave might even be reversed, one European diplomat said.

With about 48 hours to go until the deadline for nominations, nobody had formally announced an intention to run. Bookmakers made Home Secretary Theresa May the favorite ahead of former London Mayor Boris Johnson.

Health Secretary Jeremy Hunt said he was “seriously considering” a bid, while the BBC said former Defence Secretary Liam Fox was planning to run, and Sky News reported that Business Secretary Sajid Javid and Work & Pensions Secretary Stephen Crabb were mulling a joint candidacy.

A YouGov Plc poll of Conservative voters for the Times newspaper gave Theresa May, a “Remain” supporter, 31 percent support compared with 24 percent for Boris Johnson, a leading backer of the “Leave” vote.

Chancellor of the Exchequer George Osborne, who was criticized by the pro-Brexit camp for scaremongering over the economy, will not be a candidate. The one-time favorite to succeed Cameron wrote in the Times that “I am not the person to provide the unity my party needs.”

Last Supper?

In Brussels, Cameron will be pressed to give some indication on how he expects the U.K. to trigger Article 50 of the Lisbon Treaty -- the mechanism for leaving the EU -- and what he thinks Britain’s relationship with the bloc will look like after the divorce, according to diplomats in Brussels. But the outgoing prime minister has said those details would be up to his successor to hash out.

Regardless, his handling of the Brexit saga will be picked over between courses. While some leaders were impressed with Cameron’s EU stance over the past few months, and are wary of being trapped into hasty decisions, others are fed up and feel let down after he promised victory, diplomats with knowledge of the talks said Monday.

On the second day of the summit, Cameron’s chair will be empty, a striking symbol for the U.K.’s loss of power virtually overnight. Its appointee to the European Commission, Jonathan Hill, resigned on Saturday and the country is about to be stripped of a six-month stint managing EU business due next year. At least one British member of the European Parliament has relinquished sponsorship of a key piece of legislation.

EU President Donald Tusk, who co-ordinates summits, said the 27 leaders minus Cameron would undertake “deeper reflection” on a “new impulse for Europe.” He said he planned to call another meeting of the 27 in September.

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