UK must pay price for Brexit, says François Hollande

François Hollande has sent one of the strongest warnings yet that Britain will have to pay a heavy price for leaving the European Union, adding to deep concern in financial markets.

“There must be a threat, there must be a risk, there must be a price, otherwise we will be in negotiations that will not end well and, inevitably, will have economic and human consequences,” the French president said.

“Britain has decided on a Brexit, I believe even a hard Brexit. Well, we must go all the way with Britain’s will to leave the European Union,” he told a dinner in Paris attended by the EU commission president, Jean-Claude Junker, and the EU’s top Brexit negotiator, Michel Barnier.

Hollande’s remarks echo a toughening of rhetoric by the German chancellor, Angela Merkel, and a hardening of positions in European capitals after Theresa May announced that the UK would begin formal negotiations by the end of March and indicated it was heading for a hard Brexit.

Hollande has long insisted that Britain would have to live with the consequences of exiting the EU, and there was no chance of any informal negotiations before article 50 was triggered to officially leave.

After a week in which London appeared to be gearing up for a clash in talks, Hollande made clear he was more resolved than ever that EU countries must be firm with the UK in order to preserve the cohesion of the bloc and put off other countries seeking to follow Britain’s lead.

Hollande said firmness was absolutely necessary otherwise “the principles of the European Union will be questioned” and “other countries or other parties will be minded to leave the European Union in order to have the supposed benefits and no downsides or rules”.

His speech on Thursday marked the 20th anniversary of the creation of the Institut Jacques Delors, a thinktank founded by the former president of the European commission. The president used it to make a barbed reference to the recurrent exasperation in Europe with Britain’s long-held assumption that it could have its cake and eat it.

He said Delors “had also faced crises provoked by the United Kingdom”, noting that in the 1980s the late British prime minister Margaret Thatcher obtained a rebate on its EU contributions worth billions of pounds every year.

Thatcher “wanted to remain in Europe, but receive a cheque in return”, he said.

“Today, Britain wants to leave, but does not want to pay anything. That is not possible.”

May announced on Sunday that the government would trigger Brexit negotiations by the end of March, putting the country on course to leave the EU by early 2019.

Hollande, who is mindful of a possible re-election bid next spring, is, like other European powers, keen to dampen rising Euroscepticism in his own backyard – namely growing support for the far-right Front National which wants a referendum on whether France should leave the EU.

While the UK is divided over whether to go for a hard or soft withdrawal, European leaders are taking an increasingly firm line. A hard Brexit would mean quickly severing all links with EU institutions and pulling out of the single market, relying instead on World Trade Organisation rules to trade with other countries.

Since the UK voted to leave the EU in June, Hollande has urged European partners to use the exit as a “wake-up call” to improve the European project.

Earlier this week, Merkel told an audience of German business leaders that any exception to the EU’s single market rules would represent “a systemic challenge for the entire European Union”.

She appealed to German firms to show a united front with EU governments in negotiations over Britain’s departure from the bloc, urging them to support the principle of “full access to the single market only in exchange for signing up to the four freedoms”.

If any country was allowed an exception, she said, “you can imagine how all countries will put conditions on free movement with other countries. And that would create an extremely difficult situation.”