EU Tells UK PM That Free Movement Essential Part of Trade Agreement

European Union leaders met for the first time without Britain on Wednesday less than a week after it voted to leave, delivering a tough message that London can access the bloc’s lucrative single market only if it agrees to allow free movement for EU workers.

Last week’s shock referendum vote to leave the EU has caused global financial market turmoil, sent the pound sterling tumbling and wiped billions off the value of British shares. Britain’s giant financial services sector, roughly 8 percent of economy, relies crucially on access to the EU market.

Prime Minister David Cameron, who campaigned to stay in the EU and lost, has announced his resignation and left it up to his successor to negotiate the terms of Britain’s exit.

But leaders of the victorious Leave campaign have not spelled out in detail what sort of relationship they hope to build with Brussels, creating uncertainty about the future for both Britain and the rest of the bloc.

Cameron, staying on as caretaker until a successor is found, told EU leaders at his final summit with them on Tuesday that he believed the referendum was lost over the principle of unrestricted travel among EU citizens.

But free movement of workers is one of “four freedoms” — along with movement of capital, goods and services — that the EU says must be maintained by any country that wants access to its common market. The 27 leaders added a line to their summit statement at the last minute emphasizing that principle.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza