3 hard truths for U.K. in EU divorce talks

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LONDON — Dumped by U.K. voters just five days ago, the European Union is wasting no time drafting the outline of a divorce agreement — and it contains some tough messages.

Britain won’t have a plan for exiting the EU before September, when a new prime minister takes office. But that’s not stopping the leaders of the other 27 EU states agreeing their negotiating strategy for the Brexit talks.

Three hard truths have already been spelled out.

1. Update your status, soon

Last Thursday’s referendum prompted Prime Minister David Cameron to resign. The main opposition party is also in turmoil. Apart from wanting to leave, the kind of relationship the U.K. wants with the EU in future is far from clear.

It’s up to Britain to choose when to trigger formal exit talks. The EU is prepared to wait a while for the U.K. to get its act together. But it’s worried about the impact prolonged political and economic uncertainty could have on the rest of Europe, and wants negotiations to start quickly.

“[We] understand that some time is now needed to allow the dust to settle in the U.K. But [we] also expect the intentions of the U.K. government to be specified as soon as possible,” said Donald Tusk, president of the EU council of EU leaders.

Luxembourg’s prime minister, Xavier Bettel, put it more colorfully.

“The EU is not Facebook,” he told reporters. “You’re either married or divorced, not ‘it’s complicated.'”

2. You can’t walk out and keep the house keys

The EU is the U.K.’s biggest trade partner. How easily companies and banks based in Britain can sells goods and services to the 440 million people across the EU is vital for the future of the U.K. economy.

But here’s the problem. Full access to the biggest single market in the world has a price. Members have to pay into the EU budget, and allow EU citizens to enter their countries to live and work.

The Brexit campaign promised voters it would scrap both. Balancing the desire to curb immigration while retaining access to Europe’s markets is “frankly the biggest and most difficult issue to deal with,” Cameron said Wednesday.

There’s no sign that EU leaders are willing to compromise on this point.

“If you want to exit and leave this family, then you cannot expect all the obligations to drop away but the privileges to continue to exist,” German Chancellor Angela Merkel told lawmakers.

3. You’re going to be worse off, at least to start with

The Brexit vote stunned financial markets, sending the pound crashing to its lowest level since 1985 and wiping $3 trillion off global stocks held by pension funds and other investors. The U.K.’s credit rating was slashed.

Markets have recovered some poise in the last two days, but the risk of damage to the U.K. economy hasn’t gone away. Businesses are canceling investments and freezing recruitment. Telecoms giant Vodafone says it may have to move its global headquarters out of the U.K.

Fear is running particularly high among thousands of people whose jobs depend on banking, insurance and related professional services.

London is a global financial center but banks have already warned they may have to move operations to rival cities such as Frankfurt or Dublin. And some types of trading may disappear altogether.

Britain fought hard last year to keep the right to clear stocks and derivatives trades in euros, despite sitting outside the eurozone. That’s a huge volume business, but London will now lose it, according to French President Francois Hollande.

“It can serve as an example for those who seek the end of Europe… It can serve as a lesson,” he told reporters.