EU Calls for ‘Orderly’ Brexit at Historic Meeting Minus U.K.

Brexit Crisis Talks Gather EU Leaders, Minus Cameron
  • Merkel said to harden language on access to single market
  • Governments start reflection on what went wrong and why

European Union leaders called for an orderly British withdrawal from the bloc to minimize instability as they pledged to learn lessons from the U.K.’s political earthquake and do better at serving their citizens.

As EU government chiefs took the historic step of meeting without one of the bloc’s members for the first time, they lamented the British decision to part ways then began to lay plans for a new union minus its second-largest economy. That included setting the parameters of Britain’s future relationship with the EU, and insisting that negotiations to finalize secession won’t be started until the U.K. gives official notification of departure.

“Europe must be not harsh, but very clear with the U.K.,” Italian Prime Minister Matteo Renzi told reporters.

Merkel arrives for a meeting of 27 EU leaders in Brussels, on June 29.
Merkel arrives for a meeting of 27 EU leaders in Brussels, on June 29.
Photographer: Jasper Juinen/Bloomberg

In their final statement released Wednesday, leaders of the 27 other nations said “there is a need to organize the withdrawal of the U.K. from the EU in an orderly fashion.” While the decision to trigger secession talks lies with Britain, and they can wait until a new prime minister is in place, “this should be done as quickly as possible.”

The language was more abrupt than a prior draft obtained by Bloomberg News which said only that “it would be preferable to do this quickly so as to avoid entering into a prolonged period of uncertainty.”

Banks and the pound bore the brunt of the market turmoil unleashed by the U.K.’s June 23 vote to quit the EU after more than four decades, an upset that triggered a political and economic earthquake that reverberated across Europe.

Companies Cooling

Companies are already cooling on the U.K. Vodafone Group Plc said it will consider moving its headquarters unless the country negotiates continued access to the European Union’s single market. Siemens AG said it will freeze new power investment in the U.K. until it has further clarity on relations with the rest of the EU.

Cameron told his 27 counterparts over dinner on Tuesday that their refusal to give him a deal that reduced immigration to the U.K. had cost him the referendum and his job, according to a British government official. He warned them that if they want a close economic relationship with the U.K. in the future, they will have to find a way to tackle immigration.

That warning backfired, according to one EU official, who said that as a result leaders including Chancellor Angela Merkel and President Francois Hollande agreed to a joint position that there can be no access to the single market without the associated freedom of movement.

“If the U.K. would want -- at the end of the negotiations -- access to the single market, the U.K. would have to accept all the rules and all the obligations, especially one which is to financially contribute to the functioning of the single market,” Hollande told reporters. “Norway pays a certain amount to access it. It would be the same for the U.K. with a much higher fee.”

Swedish Prime Minister Stefan Loefven said market access depended on an adherence to the “four freedoms,” meaning the movement of goods, services, capital -- and people. “There’s no question about that.”

After Cameron left the European stage on Tuesday night amid talk of regret and disappointment, the EU leaders who continued to meet without him began to look ahead. As the U.K. occupies itself with the battle over its next prime minister, the opposition Labour party tears itself apart and Scotland takes its own track to strengthen ties to Europe, the EU is already pondering how it must change.

Many leaders across Europe have an eye on anti-EU forces seeking to capitalize on the British vote to push their own causes. With elections due in France, Germany and the Netherlands in 2017, countries that together make up more than half the euro-area economy, the U.K. result is proving to be a wake-up call.

“The outcome of the U.K. referendum creates a new situation for the European Union,” the leaders said. “Europeans expect us to do better when it comes to providing security, prosperity and hope for a better future. We need to deliver on this.”

Wednesday was not about taking concrete decisions on what an EU of 27 nations will look like. Leaders instead agreed to pause for “political reflection on the future” and return to the issue at an extra summit in September in Bratislava, Slovakia. By then, they hope it will be clearer what sort of partner Britain will be.

“I think it was quite clear what the consequences for Great Britain are” and so “I’m quite sure that there will be no domino effect,” Austrian Chancellor Christian Kern said in an interview with Bloomberg TV in Brussels. 

The U.K. referendum has generated “a big mess,” and “done enormous damage,” he said. “I don’t think that Great Britain will become a role model.”

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