Germany: 'No free lunch for UK' after Brexit negotiations conclude

Mark Stone, Europe Correspondent

The UK will not have advantages over the remaining 27 EU countries after Brexit negotiations conclude, says Germany's finance minister.

Wolfgang Schaeuble said: "There is no free lunch. Britons must know that."

His comments do not reflect a new position but underline a hardening of tone.

"We don't want to weaken Britain. But we also don't want that the rest of Europe is weakened," Mr Schaeuble said.

"Britain should not have advantages after the exit, that other countries don't have."

His warning comes as the leaders of the 27 remaining EU members are meeting in Brussels in a specially convened Saturday summit to discuss Brexit.

The "extraordinary" European Council is the first opportunity European leaders have had to discuss Brexit together since Article 50 was triggered last month.

At the meeting the EU will formally approve its negotiating strategy and red lines.

Several core elements of the exit deal will be discussed and highlighted as priorities to be resolved urgently:

:: Citizens' rights. The 27 want to ensure the rights of EU citizens living in the UK are secured as a matter of urgency.

:: Britain's financial contributions. Sometimes called the "exit bill", this is the amount of money the EU says the UK must agree to pay as part of financial commitments it has already made. Unofficial estimates put the figure at €50bn but no official calculations have been made.

:: Ireland. Every effort must be made to ensure the border between Northern Ireland and the Republic remains 'soft'.

Speaking ahead of the meeting, European Council president Donald Tusk said: "We all want a close and strong future relationship with the UK. There is absolutely no question about it.

"But before discussing the future, we have to sort out our past. And to handle it with genuine care, but fairly.

"This is, I think, the only possible way to move forward."

He added: "We also need solid guarantees for all citizens and their families who will be affected by Brexit, on both sides.

"This must be the number one priority for the EU and the UK.

"And the Commission has already prepared a precise and detailed lists of citizens' rights we want to protect."

Mr Tusk also underlined the need for continued unity among the remaining 27 member states.

He said: "It is only then that we will be able to conclude the negotiations.

"Which means that our unity is also in the UK's interests.

"I feel strong support from all the institutions, including the European Parliament, as well as all the 27 member states.

"I know this is something unique, but I am confident that it will not change."

As part of the discussion of Ireland, it is understood that a commitment will be given at the summit that if the island of Ireland was ever to be united, with Northern Ireland breaking away from the UK, then the united Ireland would be an automatic member of the EU.

In practice this means unification would allow Northern Ireland to re-join the EU.

Polls have consistently shown no desire either in Northern Ireland or in the Republic for unification.

EU sources have told Sky News that the inclusion of this commitment, in the form of minutes to the council's meeting, is not designed to antagonise the UK or to encourage the break-up of the UK.

"We're not seeking to dramatise it. That's why its not in the main draft but in minutes," the source said, pointing out the precedent set by the reunification of Germany.

When East and West Germany united, the East automatically became part of the EU.

Sky News also understands there will be some discussion on the status of EU institutions currently headquartered in the UK but which will need to be relocated as part of Brexit.

No detail will be discussed on where agencies like the European Banking Authority or the European Medicines Agency will move to or the timetable for the moves.

However, there may be some discussion on who should pay for the relocations and outstanding rents on institutions' UK premises.

The summit comes after a number of tricky days, both publicly and privately, between the UK and the EU.

On Wednesday, Theresa May hosted European Commission President Jean-Claude Juncker and the Commission's Brexit negotiator Michel Barnier at Downing Street for dinner.

Various sources in Brussels have suggested the meeting did not go well, with both sides hardening their line on the upcoming negotiations, particularly over the so-called 'exit bill' and the sequencing of the negotiations.

Neither side has commented publicly, but it is understood that there remains bitter disagreement over whether the UK can negotiate the make-up of its future relationship with the EU at the same time as negotiating its departure deal.

The EU has remained resolutely opposed to parallel talks, and Mr Tusk repeated the hard line in his open letter to the 27 leaders.

"Let me highlight one element of our proposed guidelines, which I believe is key for the success of these negotiations, and therefore needs to be precisely understood and fully accepted.

"I am referring to the idea of a phased approach, which means that we will not discuss our future relations with the UK until we have achieved sufficient progress on the main issues relating to the UK's withdrawal from the EU," Mr Tusk wrote.

On Thursday, after an early morning phone call with Mr Juncker, German Chancellor Angela Merkel said "some in Great Britain still have illusions" about the Brexit deal and the process of reaching it.

Addressing the German parliament, Mrs Merkel said: "Countries with a third country status - and that's what Great Britain will be - cannot and will not have the same or even more rights as a member of the European Union.

"You may think that all this is self-evident. But I have to put this so clearly because I get the impression that some in Great Britain still have illusions about this and that is a waste of time."

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