France’s
plan for a bloody Brexit
Paris
wants to cut cord quickly if Britain votes to leave the EU.
By NICHOLAS VINOCUR
and TARA PALMERI 6/8/16, 5:10 PM CET
PARIS — France is
not ready to let Britain get away from the European Union scot-free.
If the U.K. votes to
leave on June 23, Paris will push to ensure that consequences are
felt swiftly and severely to avoid emboldening anti-EU forces
elsewhere in the bloc, senior EU diplomatic sources said.
France’s tough
stance foreshadows major difficulties for London in the event of
Brexit, as a core EU member tries to assert its influence in a
reconfigured bloc and sway other countries against adopting an
easygoing attitude toward Britain. Some of those countries, such as
Germany, are more inclined to favor a softer approach.
The French push is
focused on convincing the remaining EU countries to unwind all
treaties and agreements binding the U.K. to the bloc quickly, so the
divorce is sealed by withdrawing subsidies, re-evaluating trade
relationships sector by sector, denying British supervisory bodies EU
recognition in areas like financial services, and establishing new
immigration rules, to name just a few levers, the sources said.
“If we say you are
outside the EU but can keep all of the advantages, access to the
single market without any solidarity, it’s a terrible message for
the rest of the EU,” said a senior EU diplomat who asked not to be
named due to the non-public nature of discussions. “[A painless
Brexit] is impossible if we want to keep the rest of the EU present.”
The need to send a
message is all the more pressing for the French political elite with
the anti-EU National Front positioned to make a strong showing in the
country’s 2017 presidential election. France would not be acting
out of spite, officials said, and has no interest in setting off a
tit-for-tat war of punitive measures.
But as a core EU
member, sources said it had a responsibility to strengthen the bloc
and deprive anti-EU parties — not just the FN but also the likes of
Geert Wilders’ Party for Freedom in the Netherlands — of a chance
to use Britain as a shining example of what life can be after the
European Union.
“We should avoid a
punitive logic,” said Elisabeth Guigou, Socialist head of the
foreign affairs committee in France’s lower house National
Assembly. “But our president was right when he said that Brexit
will have serious consequences… We will need to fight the
centrifugal [political] forces, to show that we can draw conclusions
from Britain’s decision.”
She added: “Britain
will have to exit from all treaties with the EU. I think that process
should go as quickly as possible, and it must not dominate the
European Union’s whole agenda.”
Europe’s basic
treaty foresees a maximum of two years of negotiations — led by the
Commission, but on terms decided by the remaining 27 EU countries —
before Brexit becomes a fact. Britain would retain full membership
rights in the European Union until those negotiations are concluded.
But that process can
be extended if all 27 other EU countries agree to it — or
potentially accelerated, if they can rapidly reach common positions
on the terms of a new relationship with Britain. France, though it
carries a lot of weight in discussions affecting the EU treaties,
won’t be the only country with strong views on how Britain should
be dealt with during the divorce proceedings; Germany, the bloc’s
most powerful member, has an interest in keeping a strong
relationship with the U.K., and other regional blocs of countries
will also have a say.
But diplomats said
there will be clear push to get the Brexit process done quickly if
Britain votes to leave.
Stumbling blocks
There are some areas
in which France is unlikely to press for tough terms. For example,
imposing restrictions on visa or travel rights for some 200,000 Brits
who live in France (of which 69,000 are pensioners) could backfire.
France has some 160,000 citizens living in Britain, who could be
targeted in turn by visa restrictions on foreign travelers and
workers.
“[The French]
don’t want to create an EU economic cold war,” said Petros
Fassoulas, secretary general of European Movement International, a
leading pro-EU group in Brussels.
However, there are
other ways of demonstrating that withdrawal from the EU can lead to
painful payback. One is to restrict the “passporting” of
financial services, which allows foreign-owned companies to do
business with the EU via offices located in Britain. The principle
works because the EU recognizes the authority of British supervisory
bodies.
But in the event of
Brexit, the EU may no longer recognize that authority, which could
push firms to leave Britain and establish bases inside the European
Union.
“I would be very
tough [on this point],” said Sylvie Goulard, a French MEP who sits
on the committee for economic and monetary affairs. “I see no
reason to give passporting to a country that decides in a sovereign
way to leave the EU… The day the U.K. leaves … you cannot
consider the British supervising authority as an authority of the
EU.”
A similar logic
would apply for British clearing houses, or financial institutions
that act as intermediaries between buyers and sellers. Currently,
Britain-based clearinghouses are supervised by the Bank of England,
but comply with EU regulations. If Britain left the EU, member
countries would re-evaluate whether they recognize clearing houses
such as LCH.Clearnet, and may push to force all clearing houses to be
based inside the EU — as the European Central Bank has already
suggested should be the case.
On trade, EU
countries would have to hammer out the terms of a new relationship
with Britain — a process that would involve negotiations via the
European Commission, and difficult debates in the Parliament and
Council. Each country would seek an advantage for its own commercial
interests against British competition, with France ready to lobby
hard for agriculture.
Paris and other EU
capitals hope that Britain would adopt Norway’s model of trade with
the Union, under which it accepts all EU regulations including the
free movement of workers in exchange for access to the single market.
But Michael Gove,
the U.K.’s Euroskeptic secretary of state for justice, has said
that Britain would no longer seek access to the single market as
such. Instead, it would try to renegotiate the terms of its
relationship along the lines of existing deals between the EU and
outsider states like Switzerland, Bosnia, Serbia, Albania — all of
which have varying levels of closeness with the bloc.
If Britain opts for
restrictive terms, such as denying free movement of workers, Paris
and other capitals will push for a narrower relationship, possibly
including customs checks for all British products entering the bloc.
Cooling effect
As for British
workers employed in the European Union, they could face much less
favorable conditions if Britain rejects free movement of workers.
For example, a U.K.
citizen living in France, or any other EU state, would not have
automatic access to social services like public health care and
public pensions, because those rights are not extended to citizens of
non-EU nations.
There are also ways
of affecting the quality of life for U.K. citizens living in EU
countries, where many choose to retire, such as Spain or the south of
France.
Unless laws on civil
rights are grandfathered in to the future relationship with the U.K.,
British citizens would lack consumer protections, access to justice
and redress when they are traveling or living abroad. Non-EU citizens
would not be entitled to such rights, and would find it more
difficult to sue in EU courts, sources said.
“People
underestimate the rights of the EU citizen,” said the senior EU
diplomat. “You may have to go through diplomatic channels to defend
your rights [if the U.K. leaves the EU].”
Brexit could also
complicate judicial cooperation between Britain and EU nations. After
a withdrawal, British citizens would no longer enjoy the right to
automatic extradition back to their home country, as they do now.
When it comes to
investment, Brexit could also have a major cooling effect. Currently,
France is the second biggest investor in the U.K. behind the United
States with 124 projects in 2015, accounting for the creation of
8,198 jobs, according to the British government. But French investors
could quickly re-evaluate future involvement in the event of Brexit.
“Our major
investors are very involved in Britain,” said Guigou. “I hope
that Hinkley Point [a nuclear power plant project being led by
France’s EDF in Britain] gets completed. But when it comes to other
projects, French investors will look twice.”
Guigou also said a
Britain-less EU would even try to take business away from the City of
London financial district. “I can tell you there is already intense
thinking about creating a financial hub on the Continent,” she
said.
Regardless of how
Britain votes, Paris sees an interest in consolidating the European
Union and ensuring that the bloc becomes more attractive for
investors, and for its own citizens.
“We will need to
make sure that at the political level, at the Commission and Council,
we make proposals for the future of the European Union,” said
Guigou. “Europe cannot continue as it’s going at the moment.
Things need to change so that citizens recognize themselves in the
project once again.”
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