U.K. Told It Has Zero Chance of Having, Eating Brexit Cake

Nickel: U.K. Single-Market Access 'Totally Unrealistic'
  • EU states to forbid split of freedoms of movement, Prouza Says
  • Each EU member can veto negotiating mandate, Czech envoy says

The mandate to negotiate Britain’s departure from the European Union must be unanimously approved by the bloc’s remaining 27 governments, leaving “zero chance” the U.K. can clinch a deal with both immigration curbs and free-market access, the Czech envoy said.

QuickTake Brexit

As U.K. Prime Minister Theresa May dismissed warnings that the EU’s eastern members may veto a Brexit deal, Czech State Secretary for EU Affairs Tomas Prouza joined the intensifying chorus of ex-communist members ruling out a deal that lets Britain “cherry-pick” among the basic freedoms of movements of goods, services, capital and labor.

“There is no way whatsoever for the U.K. to have the cake and eat it at the same time,” Prouza, the top Brexit negotiator for the country of 10.6 million, said by e-mail late Monday. “I see exactly zero chance of success if the U.K. wants to create first- and second-class citizens in Europe or if it tries to separate the four basic freedoms of movement.”

Most of the remaining EU members agree that Britain can’t maintain its current trade ties while also meeting the wishes of voters from the Brexit ballot to clamp down on immigration. The hardening position of the bloc’s 11 ex-communist members has narrowed London’s room for maneuver. While May argued Monday that it’s in everyone’s “interest” to reach an agreement, her chancellor of the Exchequer, Philip Hammond, may be ready to accept giving up access to the single market because of migration goals, according to people familiar with the deliberations.

The timing of the Brexit process became clearer last week when EU President Donald Tusk said he’d been told by May that Britain could trigger the process by February. A day later, Slovak Prime Minister Robert Fico said his country, along with Hungary, Poland and the Czech Republic, were ready to block any deal giving Britain access to the EU single market while also closing its borders to their citizens.

There’s still not a single view on Britain’s access to the single market. On Sunday, Clemens Fuest, president of the Ifo economic institute in Germany, said the EU should give some leeway to the U.K. to avoid a hard break that he said would damage everyone involved.

Elsewhere in the region, Sweden took a more conciliatory tone as EU Minister Ann Linde told a Bloomberg panel that she hoped for “some kinds of compromises on both sides.” Maltese Prime Minister Joseph Muscat said on Monday night in New York that any deal for the U.K. must be “inferior” to the benefits of membership. Croatia echoed its eastern partners.

“The possibility of ‘cherry-picking’ certain elements, such as access to the single market without participating in all four freedoms, especially the freedom of movement, should be rejected,” the Foreign Ministry in Zagreb said in an e-mail.

Stretching from the Baltic to the Black Sea, the 100 million people in the 11 former eastern-bloc members that have joined the EU since 2004 are tussling for a fair exchange of comparative advantage with their richer western counterparts. While companies from the U.K., Germany and elsewhere can snap up market share with value-added products in less-developed countries, the eastern countries need free movement to trade their main advantage of cheap labor.

“Free movement is the only way that most such services -- in construction, retail and so forth -- can be traded, as construction workers and baristas cannot provide their services remotely,” John Springford, senior research fellow at the Centre for European Reform, said in a report. “Poland will be unwilling to allow U.K. services companies to take market share while its citizens are denied equivalent opportunities in Britain.”

‘Clear Rule’

While a final deal has to be approved by a qualified majority comprising of 72 percent of the remaining members and 65 percent of the EU population, any member can veto the process while granting the negotiating mandate, a process that will be updated by the bloc’s leaders, Prouza said.

“There will be a very clear rule: nothing is agreed until everything is agreed,” Prouza said. “Each member state will be able to veto any part of the negotiation mandate to make sure the mandate respects the interests of all EU members.”

The final package must address four elements: access to the internal market, so-called passporting to let British-based financial institutions do business on the continent, payments into the EU budget, and free movement of labor for EU citizens to the U.K., he said.

“Having separate deals on trade and free movement is another idea totally disconnected from reality,” Prouza said. “They are leaving, not us, so it is up to them.”

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