Hollande Toughens Stance on Brexit, Warning of Price to Be Paid

  • French leader says threat needed in negotiation with Britain
  • Pound slides to 31-year low against dollar in flash crash

President Francois Hollande said the U.K. will have a “pay the price” of opting for a hard Brexit and that the European Union has to prepare to defend its interests in negotiations.

QuickTake Brexit

The pound plunged to a 31-year low, with traders saying the slump was exacerbated by computer-initiated sell orders. The currency was already in free-fall amid concern about a so-called hard Brexit and Friday’s slide took it to the weakest level since March 1985.

“There has to be a threat, there has to be risk, there has to be a price to pay, or else we will be in a negotiation that won’t end well, and that will necessarily have economic and human consequences,” Hollande said in a speech late Thursday at the Jacques Delors Institute in Paris. “The U.K. has decided to go for a Brexit, a hard Brexit I believe. Well, we’ll have to go all the way. The U.K.’s choice is to exit the EU.”

The remarks are the harshest yet from Hollande and his first since this week’s Conservative Party conference in Birmingham, in which British Prime Minister Theresa May indicated she will prioritize controlling immigration in her talks with the EU over defending business interests. If the “U.K. wants to leave without having to pay anything: that’s just not possible,” Hollande said. 

“We must be firm or we will jeopardize the very principles of the EU,” Hollande said, warning of the risk that “other nations will get the idea to exit the EU they can get the benefits without having the inconveniences and the rules.”

Before it's here, it's on the Bloomberg Terminal.