EU could take economic hit to deter Brexit copycats

It's that time in the month again when Brussels moves to Strasbourg. It happens every month for one week only: the European Parliament travelling circus decamps from Belgium to France.

Why? That's another story . This week though is particularly busy here.

The 751 MEPs and all their aides have been joined by the presidents of the European Council and Commission, Donald Tusk and Jean-Claude Juncker and their staff; gathered to congratulate the parliament's new president on his appointment.

Antonio Tajani, the Italian centre right former Berlusconi aide, was elected late on Tuesday.

The Maltese Prime Minister is also here. Malta holds the EU rotating presidency at the moment and so Joseph Muscat, in a sense, speaks for the Union.

Everyone's had the night to absorb Theresa May's long awaited Brexit speech. And in the UK at least, there's a hunger to find out what they all think.

Will they give the UK a good deal? Are they bothered that the UK will leave the single market? How realistic is Mrs May's desire for a 'new comprehensive bold and ambitious free trade agreement'?

As the British Prime Minister delivered her speech yesterday, my colleagues and I glanced around the parliament chamber. We spotted two of the more than seven hundred MEPs gathered watching her words. Doubtless, more were tuned in one way or another.

But the point is that most here have multiple focuses. There are plenty of fires in Europe. The continent's in a state of crisis. Brexit is just one, albeit rather a large one.

So if Britain wants a singular focus on Brexit, a good negotiation, a fast trade agreement and a future relationship with the EU that's better than membership, then from the perspective of those who'll grant that, they're dreaming.

Of course, we're only at the start of the process. Both sides will give once things get going. But the bottom line from the perspective of the remaining 27 governments is unity; the preservation of the union is their motivating factor in any deal they reach.

The European Parliament must agree any Brexit deal and, while it includes Eurosceptics (UKIP and their continental allies), it's broadly a pro-Europe body made up of passionate believers in the EU project.

For them to give Mrs May all that she wants would embolden the EU doubters across the continent. They can't allow that to happen.

When Mrs May says 'We don't seek membership of the single market. Instead, we seek the greatest possible access to it', they see that as her having her cake and eating it.

When she says 'we are not going to be half in and half out' but then says that maybe the UK can 'become an associate member of the Customs Union in some way', that to them is cherry picking.

She (Munich: SOQ.MU - news) said: "I do not believe that the EU's leaders will seriously tell German exporters, French farmers, Spanish fishermen ... that they want to make them poorer, just to punish Britain and make a political point."

Consider this though: she has opted for what essentially amounts to a 'hard Brexit'. As the Director of the Centre for European Reform, Charles Grant, says, Mrs May has put the restoration of UK sovereignty ahead of economics. She said herself when she campaigned to remain, that Brexit would hit the British economy.

Using precisely the same logic, don't underestimate the ability of Europe to put their own politics and ideals ahead of logical economics to preserve the union.

The remaining 27, led by a Franco-German axis, may not do a swift, ambitious trade deal with the UK. That could well harm German car makers, French farmers, Spanish fishermen and the rest, but if it preserves the union and discourages other nations from leaving, they may think it's worth it.

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