Merkel sees no need to rush Britain into quick EU divorce

The European Central Bank said Britain's financial industry would lose the right to serve clients in the EU.

German Chancellor Angela Merkel on 30 June 2015. Picture: AFP.

LONDON/BERLIN - German Chancellor Angela Merkel sought on Saturday to temper pressure from Paris, Brussels and her own government to force Britain into negotiating a quick divorce from the EU, despite warnings that hesitation will let populism take hold.

Eurosceptic in other member states applauded Britons' decision to leave the European Union in a referendum that sent shockwaves around the world, with far-right demands for a similar vote in Slovakia underlining the risk of a domino effect.

With the referendum decision finally made on Thursday and Prime Minister David Cameron having announced his resignation, European politicians and institutions felt free to shower demands on Britain over its future outside the world's largest trading bloc.

The European Central Bank said Britain's financial industry, which employs 2.2 million people, would lose the right to serve clients in the EU unless the country signed up to its single market - anathema to "leave" campaigners who are set to lead the next government in London.

Almost alone in continental Europe, Merkel tried to slow the rush to get Britain out of the EU door. Europe's most powerful leader made clear she would not press Cameron after he indicated Britain would not seek formal exit negotiations until October at least.

"Quite honestly, it should not take ages, that is true, but I would not fight now for a short time frame," Merkel told a news conference.

"The negotiations must take place in a business-like, good climate," she said. "Britain will remain a close partner, with which we are linked economically."

Britain's decision to leave the EU is the biggest blow since World War Two to the European project of forging greater unity. But Merkel appeared more conciliatory than others within her coalition government and elsewhere in Europe.

The chief executive of Britain's "Vote Leave" campaign called for informal talks before London notifies the EU it wants to leave under the Lisbon Treaty, which provides for two years of divorce proceedings.

But German Foreign Minister Frank-Walter Steinmeier, a member of Merkel's Social Democrat coalition partners, showed a greater sense of urgency on getting talks going.

"This process should get underway as soon as possible so that we are not left in limbo but rather can concentrate on the future of Europe," he said after hosting a meeting of his colleagues from the six founding members of the EU - Germany, France, Italy, the Netherlands, Belgium and Luxembourg.

French Foreign Minister Jean-Marc Ayrault warned of the dangers of delay. "We have to give a new sense to Europe, otherwise populism will fill the gap," he said.

They followed European Commission President Jean-Claude Juncker, who said on Friday it didn't make any sense to wait until October to negotiate the terms of a "Brexit".

Britain's representative on the EU executive, Financial Services Commissioner Jonathan Hill, resigned on Saturday after campaigning against a British exit.

EUROPEAN 'TITANIC'

In Britain itself, divisions widened after the relatively close referendum. In contrast to Cameron, Scotland's pro-EU first minister said she wanted to open negotiations directly with Brussels. The option of a second referendum on independence from the United Kingdom - after Scots rejected the idea two years ago - should be "on the table", she said.

South of the border in England, eurosceptic newspapers rejoiced but others pondered an uncertain future. "So what the hell happens now?" asked the Daily Mirror.

Cameron announced on Friday he would resign after Britons voted 52-48 percent to exit the EU, a result that sent global stock markets plunging, and inflicted the biggest one day drop on sterling in history.

He promised to stay on as a caretaker until October while the Conservative Party chooses a new leader.

Even before the British vote, anti-establishment parties were on the rise across the EU, not least in France where far-right National Front leader Marine Le Pen is expected to perform strongly in a presidential election next year.

Raising mainstream fears that other member states might be tempted to follow the British example, Slovakia's far right People's Party on Saturday launched a petition for a referendum on the country's future in the EU.

"Citizens of Great Britain have decided to refuse the diktat from Brussels. It is high time for Slovakia to leave the sinking European 'Titanic' as well," the party said.