Macron Tells May ‘Be My Guest’ in EU Market But Accept the Rules

Britain must pay into the European Union budget and accept the jurisdiction of EU courts if it wants its banks to keep full access to the bloc’s markets after Brexit, French President Emmanuel Macron said, piling conditions on Prime Minister Theresa May that breach her red lines.

Speaking alongside May after a daylong Anglo-French summit near London, Macron said his overriding goal in the Brexit negotiations is to ensure that “the single market is preserved, because that is very much at the heart of the European Union.”

He said it’s “very much” up to the U.K. to decide what it wants.

“I am here neither to punish nor to reward the U.K.,” Macron told reporters at the conclusion of the summit. “You want to accept a single market with finance being part of it? Be my guest, but that means financial contributions and accepting European jurisdiction.”

The debate over how Britain’s banks and financial services industry will be able to access European markets after Brexit is shaping up to be the biggest battle of the forthcoming negotiations on the future relationship between Britain and the bloc. 

Britain wants to maintain access that’s as near as possible to current arrangements -- while opting out of the bits of EU membership it doesn’t like such as free movement of people. The EU says Britain can’t be in the single market unless it accepts all its rules, and says that May’s red lines mean a trade deal on goods, without much on services, is all that’s on offer. 

Financial services employ more than 2.2 million people in Britain and contribute nearly 11 percent of economic output, according to the CityUK, an industry body. Paris is among EU cities lobbying banks to move jobs from London after Brexit.

“It is actually in the interests not just of the United Kingdom but also of the European Union as it goes forward to continue to have a good economic relationship with the U.K.,” May said at the same news conference. “That should cover both goods and services. The City of London will continue to be a major global financial center. That is an advantage not just for the United Kingdom, it’s actually good for Europe and good for the global financial system.”

Macron stuck to the script of EU chief negotiator Michel Barnier as he reeled off the options available to the U.K., including the Norwegian and Canadian models. In exchange for access to the single market, Norway accepts its rules without having any say in writing them, and pays into EU coffers -- both politically unpalatable options for May. Canada’s trade deal is the best in its class, but wouldn’t cover financial services and the U.K. has already rejected it as too limited. Brexit Secretary David Davis has said he wants a "Canada plus plus plus" deal.

For France, a decline in the importance of the U.K.’s finance hub presents an opportunity to poach jobs from the City of London. Institutions including Deutsche Bank, JP Morgan and Goldman Sachs are preparing to move staff from London to the continent.

In a France 2 TV interview aired shortly after the two leaders addressed the press, May refused to be drawn out on how she would vote if a second referendum on European Union membership were held now, a missed opportunity to allay suspicions among Brexiters by scotching growing speculation in Brussels that the U.K. could change its mind. May, who voted Remain in 2016 and declined to answer the same question in October, nevertheless said "there isn’t going to be another vote."

The visit began with the two leaders dining on crab and duck breast at the Royal Oak pub in May’s Maidenhead constituency. they then drove to the Sandhurst Royal Military Academy southwest of the capital, where they watched a military parade and a fly-past from a British Typhoon and a French Rafale jet. The day rounded off with a reception at the V&A Museum in London, where May -- in French -- urged French citizens living in Britain not to leave the country.

The summit, designed to underline that the relationship between the two nations goes beyond Brexit, included ministers for foreign affairs, defense, security and culture. Agreements were reached on military cooperation, immigration, nuclear power and space exploration. Notably, France pledged to loan Britain the Bayeux Tapestry, a 950-year-old artifact depicting William the Conqueror’s victory in the Battle of Hastings.

The two countries also signed a new deal on immigration called the Sandhurst Treaty that updates the existing Le Touquet agreement, calling for faster processing of immigrants in France who are seeking to reach U.K. shores. May, for her part pledged 50 million ($61 million) euros to beef up border controls in the French port of Calais.

Building on the theme of deepening links with France, Foreign Secretary Boris Johnson wants to explore the idea of building a 20-mile bridge linking the two countries, The Times reported Friday, without saying where it got the information. Johnson himself said on Twitter: “Our economic success depends on good infrastructure and good connections. Should the Channel Tunnel be just a first step?’’