The European Union “will not turn its back on the UK” following the Brexit vote, according to Luxembourg’s finance minister, who called for a “smart divorce” that maintained close trade and investment links.
Pierre Gramegna described the UK as an “important commercial and financial partner” and warned that its exit could make the rest of the EU “less attractive” if it doggedly pursued policies that eroded its competitiveness.
He also signalled that Luxembourg was prepared to give the UK more time if it did not reach a quick secession deal with Brussels after triggering Article 50, which starts the negotiating process for it to leave the bloc.
Mr Gramegna suggested Luxembourg would not block a deal to extend the two year negotiating window if an accord had not been reached within that time, adding that it was important that a split was reached by “mutual consent”.
The career diplomat also said it was “normal” for the UK to start discussions on trade deals with countries outside the EU, even though talks fly in the face of EU rules.
“To portray the route that the UK is going down as something strange or not reasonable is not very realistic,” he told journalists in Luxembourg.
“The UK inside or outside the EU will remain an important commercial and trading partner, full stop,” he said.
“I am convinced that the UK will not turn its back on the EU, and we in Luxembourg… are saying exactly the same, we are not going to turn our back on the UK.”
While Mr Gramegna’s comments suggest that the UK will reach a favourable trade deal with its European neighbours, he warned that the country “cannot have its cake and eat it”, and that being inside the single market of goods and services was not compatible with curbs on immigration.
“Freedom of movement is part of the idea of the single market, you cannot pick and choose what you like,” he said.
“The UK would like to keep everything they like in the EU, and get rid of all of the things that they don’t like, but that’s not really the negotiation how it’s going to go.”
Mr Gramegna’s comments appeared to rule out a Norway-style deal with an emergency brake on free movement.
“If you backtrack on that or any other of the four pillars [goods, service, capital, labour], then the whole system doesn’t work,” he said.
Philip Hammond, the new Chancellor, has already said the UK “will come out of the single market” as a result of the referendum result.