Europe's leaders begin crunch talks to contain Brexit fallout

The US secretary of state, John Kerry, is flying into Brussels for urgent talks at the start of a crunch week for Europe as leaders struggle to contain the fallout from Britain’s seismic decision to leave the EU.

Kerry will meet the EU’s foreign policy chief, Federica Mogherini, in the Belgian capital on Monday morning and then fly to London for talks with the British foreign secretary, Philip Hammond.

The president of the European council, Donald Tusk, is to meet French president François Hollande in Paris before flying with Hollande to Berlin for talks with the German chancellor, Angela Merkel, and Matteo Renzi, the Italian prime minister, ahead of a crucial two-day EU summit starting on Tuesday.

European leaders have said they would like Britain to make a swift start on the marathon task of extricating itself from the bloc by triggering article 50 of the Lisbon treaty, the untested procedure governing how a member state leaves.

But London has so far shown no indication it wants to launch formal exit proceedings, with the prime minister, David Cameron, who resigned on Friday following the vote, leaving the task to his successor and leading Brexit campaigners demanding informal withdrawal talks before locking Britain into the strict two-year timeframe laid down in the article 50 process.

The president of the European parliament, Martin Schulz, warned this weekend that a period of limbo would “lead to even more insecurity” and said the Brussels summit was the right time to begin formal exit proceedings.

Cameron is due to attend the Tuesday evening summit dinner before going back to London, leaving the remaining 27 member states to discuss on Wednesday how to handle the biggest blow to the bloc in its 60-year history.

EU officials said on Sunday night that Britain was in “a very significant political crisis, not only of the leadership of the ruling party … but a crisis that goes much deeper”. To expect Cameron to launch exit proceedings so soon was “unrealistic”, one official said.

The EU has no legal means to force Britain to launch the exit process and diplomats in Brussels are now tending to the view that the UK should trigger article 50 by the end of the year at the latest, allowing it time to leave the EU before European parliament elections and the appointment of a new European commission in 2019.

Some, however, have warned Britain “may never” trigger the formal divorce process because the tight deadline for talks puts the leaver in a weak position. “I personally believe they will never notify,” one diplomat said. “The moment you push the button you’re in a stupid negotiating position.”

Brussels officials have also emphatically ruled out informal talks on a possible trade deal before the UK triggers article 50. “No notification, no negotiation,” one official said on Sunday. A diplomat added: “If they treat their referendum as a non-event, we will also treat their referendum as a non-event.”

Hollande declared this weekend there was no going back on Brexit, saying: “What was once unthinkable has become irreversible.” Hollande said France and Germany must use their strong friendship to seize the initiative, warning that “separated, we run the risk of divisions, dissension and quarrels”.

He and and Merkel, who has urged calm and stressed the timing of Brtain’s exit should be left to London, had discussed the issue by phone. An aide said the leaders of the two countries that have traditionally formed the EU’s driving force were in “full agreement on how to handle the situation”.

The commission also meets this afternoon to prepare the ground for the summit. Jonathan Hill, the British commissioner, who dramatically resigned on Saturday but remains in office until mid-July, will attend.

Once the Tory peer stands down, handing over the powerful job of financial markets to Valdis Dombrovskis, the man in charge of the euro, Britain will have no commissioner round the table at the EU’s executive. Downing Street has said Cameron will leave the decision on a replacement to his successor.

Diplomats in Brussels, meanwhile, have not held back on their criticism of Cameron’s catastrophic decision to ignore their warnings and go ahead with a Brexit referendum.

The prime minister reportedly told the commission’s president, Jean-Claude Juncker, at a 2014 G20 summit that he could win a referendum “by a margin of 70 to 30”. Juncker replied that even Luxembourg would not vote to stay in the EU by such a big majority, according to one EU diplomat.

Brussels insiders are also frustrated and angry that Cameron did not use the UK reform deal – painstakingly agreed by all EU member states in February – to defend the EU during the campaign. “You don’t reverse a perception between 19 February and 23 June that you have created,” the diplomat said.

As shockwaves from the Brexit decision continued to spread, EU officials also said on Sunday the bloc was preparing to move its European Banking Authority from London, setting up a race led by Paris and Frankfurt to host the regulator.

Powered by article was written by Jon Henley and Jennifer Rankin in Brussels, for on Monday 27th June 2016 09.45 Europe/ © Guardian News and Media Limited 2010