U.K. Brexit Red-Line Plans Seen Incompatible With EU Market

The red lines Britain has signaled it will adopt in Brexit talks are “fully incompatible” with its aspiration to keep membership in the single market, and there won’t be any negotiations until the U.K. triggers the process, Slovenia’s prime minister said.

Miro Cerar, premier of the former Yugoslav Republic of 2.1 million people, echoed other EU leaders, saying the four freedoms of the common trading zone -- the movement of goods, services, capital and people -- were “indivisible.” The bloc’s 27 remaining members can’t allow the U.K. to “cherry-pick” terms in Brexit talks because it could lead to others to seek opt-outs, he said in an interview on Tuesday.

A week after an aide to Brexit Secretary David Davis said the U.K. may rule out paying contributions to the common budget, reject jurisdiction of EU laws and courts, and regain control over immigration after Brexit, Cerar said the bloc can prosper without a member that has resisted steps toward further integration. He also shot down the notion, floated by U.K. Chancellor of the Exchequer Philip Hammond last week, that EU states may soften their stance behind closed doors once talks begin.

“This is not just a negotiating tactic, but our firm belief that we should really somehow stick to the standpoints taken so far, because Brexit actually caused a lot of insecurity among European citizens about the future of the EU,” Cerar, a 53-year-old former law professor, said in his office in Slovenia’s capital, Ljubljana. “If the rest of the EU, I mean the 27, want to demonstrate their unity, their commitment and their willingness and readiness to act together for common goals without Britain, then of course we must not allow our positions to be too flexible.”

British Prime Minister Theresa May’s government is under increasing pressure following the U.K.’s June vote to leave the EU. The pound has plunged more than 17 percent against the dollar since the referendum, the worst among 32 major currencies tracked by Bloomberg, and 5.5 percent since before Davis and May signaled on Oct. 2 they might not prioritize single-market membership. Bankers in London are worried that by focusing on immigration, the government will cost them the rights that let them operate in the bloc.

Blocking Brexit

EU leaders, notably including German Chancellor Angela Merkel, have indicated they won’t budge on rules that require countries with unfettered market access to adhere to free movement. The Czech Republic, for example, may block a Brexit agreement if the U.K. doesn’t respect the right of citizens to live and work in other countries in the bloc, Finance Minister Andrej Babis said in an interview Tuesday.

“Of course it’s incompatible,” Cerar said when asked about the “red lines” outlined last week by Davis’s aid, Stewart Jackson. “It’s fully incompatible, clearly.”

Cerar said his euro-area country’s goal was to preserve the single currency, the passport-free Schengen area, and the common market “according to the rules.” The EU now needs to prevent disruption among other members and explain the advantages of a strong union to its citizens. A failure to tackle the thorny issues of migration and security may mean “we won’t be talking much about financial challenges in the future, but how to prevent conflict between states,” he said.

While Cerar characterized the Brexit vote as “sad,” the nations that stay in the EU can benefit once the U.K. is gone, he said. The bloc needs to keep its doors open for potential future members, including western Balkan countries. It may even, perhaps a decade or two from now, allow the U.K. back in if “they change their minds,” the prime minister said.

“We can really provide for an even stronger union, a more cohesive union, a better union for our citizens,” Cerar said. “Especially the U.K. was one of the countries always playing its own game besides that of the union, and this was very difficult for all of those processes that were meant to bind us together to make us stronger.”