France Warns U.K. on ‘Illusion’ of Keeping Advantages Outside EU

  • Sapin speaks in Bloomberg Television interview in Japan
  • G-7 discuss Brexit as key risk for financial markets

French Finance Minister Michel Sapin warned that Britain is deluding itself if it thinks it can keep the advantages of European Union membership outside the bloc, as he said Brexit would have far-reaching consequences for both the U.K. and Europe.

"There is one thing that is very clear, very simple: it can’t be the same after as before," Sapin said in an interview for Bloomberg Television in Sendai, northern Japan. "It will have a cost for the U.K. We cannot nurture the illusion that the U.K. outside the EU will have the same advantages. It will lose a certain number of advantages.”

Sapin, who is in Sendai for a meeting of the Group of Seven finance ministers and central bankers, echoed warnings from the group earlier Friday, which identified Brexit a key risk to financial markets. The vote on June 23 has split U.K. Prime Minister David Cameron’s Conservative Party, sparked speculation as to his eventual resignation in the event of an exit and triggered warnings from international institutions from the International Monetary Fund to the Organization for Economic Cooperation and Development.

Risks to financial markets and to U.K. growth from Brexit were singled out in discussions at a symposium of finance ministers, central bankers and economists on strategies for balanced and sustainable growth in Sendai earlier Friday, according to an official from a G-7 member, who declined to be named because the talks were private.

‘All Agreed’

“We’re all agreed here that the exit of the U.K. would be an economic shock, first of all for the U.K., then for Europe and for the world as a whole," Sapin said. "It’s a risk that we shouldn’t take.” 

Sapin’s caution that Britain cannot enjoy the same trading benefits outside the EU -- a key argument of Brexit campaigners -- echo warnings earlier Friday by Canadian Finance Minister Bill Morneau, who rejected the idea of a so-called Canadian model for the U.K

"Our message would be that it’s not straightforward to develop trade agreements," Morneau said in an interview in Sendai. "It’s certainly not straightforward to develop trade agreements after deciding to move out of a trade bloc. I hope that’s something the British people will take into account when they think about their vote."

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