Luxembourg minister warns UK cannot be 'in and out' of EU

Luxembourg's Finance Minister Pierre Gramegna warned the UK cannot expect "full and automatic" access to the EU single market after Brexit, ahead of a major speech on Friday by UK Prime Minister Theresa May. 

"You cannot be in and out at the same time," he said at the Association of the Luxembourg Fund Industry (ALFI) annual conference in Luxembourg city. 

However, he encouraged May to use her speech in Florence to kick start the negotiations which have stalled over issues such as the Britain's exit bill. May is widely expected to set out her vision for Britain's future relationship with the EU.

"In the end it's in nobody's interest that the UK drifts out into the Atlantic, closer to the United States, or is an isolated island," he said.

He suggested the EU should be "constructive" in establishing a future trade and finance relationship with the UK. 

Speaking to fund professionals, the minister said Brexit was a regulation issue for financial services and promised to "defend" the Luxembourg fund industry during any "uncertainty" created by Britain's departure from the EU.

"You can count on the Luxembourg government and finance minister to defend as far as possible all the good elements, all the assets, all the experience we have gathered over 30 years here in Luxembourg in the investment fund industry," he said. 

Reporting by Hannah Brenton and Roxana Mironescu