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Jun 29, 2016 2:38 PM

EU spells out conditions for single market access to Britain

The Associated Press

BRUSSELS (AP) European Union leaders drew a stark line along the British Channel on Wednesday, telling the U.K. that it cannot keep valuable business links with its former continental partners in a seamless single EU market, if it doesn't also accept European workers.

The challenge cuts to the heart of the British vote to leave the bloc following a virulent campaign where migration from poorer EU countries was a key concern. It also sets the scene for the complex departure negotiations facing departing Prime Minister David Cameron's successor, for which nominations opened in London Wednesday.

Meeting for the first time without the U.K., the 27 other EU nations set out a united strategy to face the next British government which will seek to salvage as many of the EU rights as possible while reneging on a maximum amount of obligations.

They emerged from the summit insisting that the "four freedoms" central to European unity are indivisible: the free movement of people, services, goods and finances.

In Cameron's absence, the most palpable remaining link to Britain at the summit was the English language used. The remaining presidents, chancellors and prime ministers showed a firm common resolve, committing to be "absolutely determined to remain united," EU Council President Donald Tusk said.

The leaders sought to dispel any notion that the referendum result will amount to their Waterloo.

"With a disunited United Kingdom, we need a united Europe more than ever," Luxembourg Prime Minister Xavier Bettel said.

Tusk convened a special EU summit on Sept. 16 in Slovakia's capital Bratislava to work out a plan to keep the EU united. There's a widespread sense that the post-war project to foster peace via trade has become too bureaucratic and undemocratic with not enough meaning for its 500 million citizens. The initial EU founding nations in the west lean toward a tighter, closer union, while newer nations in the east want to keep more control with national governments notably of their borders.

French President Francois Hollande warned that allowing the status quo to continue would benefit populist forces that seek "the end of Europe." France is among EU countries now facing calls for referendums on quitting the bloc, mainly from the far right.

German Chancellor Angela Merkel said the lesson from Britain's departure isn't necessarily either deeper integration or returning more powers to national governments. She said Wednesday: "this is not about more or less Europe as a principle, but about achieving better results." She said that combating youth unemployment, for example, could involve both scrapping EU directives and deepening European cooperation.

"The coming weeks will be decisive," Hollande said. "Europe must show its solidity."

That will be tough when it comes to immigration. Central European nations led by Hungary refuse to accept imposed EU refugee quotas, and countries further north have all tightened border controls in response to the arrival of more than 1 million migrants last year. Britain is more concerned about EU immigration, since its strong economy draws hundreds of thousands of workers from other EU nations.

The shock British vote has roiled markets and will rob the EU of its richest financial market, biggest military power and a diplomatic giant. It could also prompt an unraveling of the U.K.

Scotland's First Minister Nicola Sturgeon met Wednesday in Brussels with European Parliament President Martin Schulz and the leader of the EU executive, Commission President Jean-Claude Juncker. Scottish voters overwhelmingly chose to remain in the EU but were drowned out by English voters. Sturgeon has indicated there may be a new referendum on Scottish independence.

"It was a good opportunity for me to set out Scotland's position and Scotland's desire to remain within the European Union and to protect our relationship with the European Union," Sturgeon said after meeting Schulz. She added: "I don't underestimate the challenges that lie ahead for us seeking to find a path."

In London, nominations opened Wednesday to replace Cameron as leader of the Conservative Party, with Work and Pensions Secretary Stephen Crabb the first official contender. Former London Mayor Boris Johnson and Home Secretary Theresa May are also expected to run.

The economic fallout from the vote has been severe. Ratings agency Fitch expects growth and investment in Britain to fall next year due to uncertainty over the exit. Some businesses are putting investments on hold and Fitch said "there is little doubt that the U.K. referendum vote in favor of leaving the EU will take a significant toll on the economy."

Vodafone, one of Britain's biggest companies, will consider moving its group headquarters because of the vote. The company, which says a majority of its customers are in other EU countries, said in a statement Wednesday that EU membership had been an important factor in its growth, and that free movement of people, goods and capital were integral to any pan-European business.

"This is the world's fifth-biggest economy and 15 to 17 percent of the European Union's gross domestic product, and if this country leaves the internal market .... then of course that will be a difficult situation," Merkel said.


Associated Press writers Jill Lawless in London, John-Thor Dahlburg, Lorne Cook and Angela Charlton in Brussels contributed to this report.


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