Merkel Warns U.K. of Isolation If Brexit Camp Wins Vote

  • Intervention backs up Cameron as polls show swing to ‘Leave’
  • British premier makes TV campaign appearance Thursday night

Only Three Weeks Left Till Brexit Vote

German Chancellor Angela Merkel made her strongest intervention in the Brexit debate so far, warning that the U.K. would be isolated and lose influence if it leaves the European Union in the referendum in three weeks’ time.

Merkel cited trade and the single market as key reasons for the U.K. to stay in the 28-nation bloc, backing the economic arguments put forward by Prime Minister David Cameron and supported by bodies such as the International Monetary Fund. Campaigners for leaving argue that the U.K. can continue doing business freely with the EU and reach favorable free-trade deals with the rest of the world once out of the bloc.

“For those coming from the outside, and we’ve had lots of negotiations with third-party countries, we would never make the same compromises, or achieve the same good results, for states that don’t take on the responsibility and costs of the single market,” Merkel said at a news conference in Berlin on Thursday. “One nation alone will never be able to achieve such good results.”

The message from the leader of Europe’s biggest economy and the continent’s most powerful nation risks a British backlash as she adds her support for staying in to that of President Barack Obama and other world leaders. Cameron, who makes an hourlong television campaign appearance Thursday night, is attempting to regain the initiative after polls in recent days suggested a swing to the “Leave” campaign, which has moved its focus to cutting immigration.

‘Qualitatively Better’

“It’s in all of our interest, but also in British interests, to say that we’re putting all of our weight into a negotiation as part of the European Union,” Merkel said, referring to efforts to forge trade agreements. The result of such cooperative action “will be qualitatively better for the people in the U.K. than if that happens from the outside.”

The pound dropped earlier this week amid the swing in the polls. Citigroup Inc. economists Willem Buiter and Tina Fordham said in a note Thursday they’re “increasingly concerned” in the run-up to the June 23 vote. The Number Cruncher Politics Brexit Probability Index has risen to 21.7 percent from 17.4 percent early last week.

“If Britain left, you can expect stricter financial-market rules in the EU from one day to the next” because the U.K. has been blocking such measures, Gunther Krichbaum, the head of the German parliament’s European affairs committee, said in an interview. “At that point, the price of free access to the common market would be to accept all of the rules made in the EU.”

‘Much Greater’

Jeroen Dijsselbloem, the Dutchman who heads the group of euro-area finance ministers, told an audience of business leaders in Brussels that Britain faces “much, much greater” economic risks than the rest of the EU if it leaves the bloc.

Cameron is due to appear in a question-and-answer session on Sky News television at 8 p.m. London time. Opposition Labour Party leader Jeremy Corbyn also weighed in Thursday, highlighting the social and welfare case for staying in the bloc, argued that EU regulations have ensured paid leave for 26 million workers in Britain and maternity leave for 340,000 women a year.

“Several ‘Leave’ supporters have stated clearly they want to leave Europe to water down workers’ rights, to rip up the protections that protect work-life balance, that prevent discrimination and prevent exploitation and injustice,” Corbyn said at an event in London.

Nigel Farage, leader of the U.K. Independence Party claimed the “Leave” side is picking up momentum as the campaign heats up and welcomed the focus on immigration by Justice Secretary Michael Gove and former Mayor of London Boris Johnson.

“The fact that Boris Johnson and Michael Gove have now decided that controlling immigration can only be done by leaving the EU is a decisive moment in this campaign, because that’s what the people in this country want,” Farage said in an interview with Bloomberg TV. “The ‘Remain’ side are speaking for their own, vested self-interest and what we’ve got to say is, ‘this is the little people,’ this is ordinary people against the political establishment.”

In other developments:

  • In a further example of the blurring of traditional political boundaries in the campaign, Chancellor of the Exchequer George Osborne co-signed a letter with his Labour predecessor, Alistair Darling, saying the “Leave” campaign must answer five questions on its plans for trade, jobs and the public finances if Britain votes to leave. They called the proposals “uncosted and unworkable.” 
  • The “Leave” campaign hit back with five questions on immigration it said Cameron must answer.
  • Liam Fox, Cameron’s former defence secretary, gave a speech making the case for leaving the EU because of the “cost of uncontrolled migration.”
  • The Economists for Brexit group issued a rebuttal of what it calls “the Big Fix:” modeling by domestic and international agencies that point to the economic damage of a vote to leave. Its chairman, Patrick Minford suggested at a presentation in London that Osborne is “economically illiterate.”
  • Vote Leave wrote to Cameron and the head of the Electoral Commission expressing concerns that some ineligible EU citizens had been sent polling cards for the referendum.

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