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Friday April 28th, 2017 1:51PM

AP Interview: Sweden PM: Brexit deal in 2 years 'very tough'

By The Associated Press
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STOCKHOLM (AP) — Sweden has a tough-love message for Britain as it prepares to trigger its European Union exit: A deal within two years is unlikely, striking a good agreement will be a struggle and the U.K. will have to pay a big bill before it is allowed out the door.

Prime Minister Stefan Lofven says it will be "very tough" to seal a deal between Britain and the 27-nation bloc by 2019, the timeframe laid out in EU rules.

British Prime Minister Theresa May plans to invoke Article 50 of the key EU treaty, starting the formal exit process, by March 31. That sets a two-year clock ticking down to a deal — or to Britain crashing out of the EU without one.

Lofven said that it's "optimistic" to think the U.K. can be disentangled from the bloc's web of laws, benefits and obligations by March 2019.

"I have said from the start that I think this is going to be very tough, to do all these things within two years," he told The Associated Press.

"There will be difficult times," he added. "We would be naive not to say that."

Lofven says he speaks as a friend. Sweden is one of Britain's closest allies in the bloc, a businesslike northern nation that sometimes feels frustrated by Brussels bureaucracy and — like the U.K. — does not use the euro single currency.

Lofven, who heads Sweden's center-left coalition government, acknowledged that "there was an anger" in some EU capitals after the British vote in June.

The plainspoken former trade union leader sees Sweden as a level-headed mediator that can help calm feelings, focus minds and ensure "orderly, pragmatic negotiations ... so that we can make sure that after these negotiations we still have a good relationship."

But he still has a sobering message for the British government, which hopes that a quickie divorce and a new free-trade agreement between the U.K. and the EU can be rapidly achieved.

In an interview with the AP inside the imposing, orange-hued government headquarters in Stockholm, Lofven stressed that there can't be negotiations about a new U.K.-EU partnership until the terms of Britain's exit are settled.

That will mean Britain agreeing to pay a hefty bill, currently estimated by EU officials at as much as 60 billion euros ($64 billion), to cover expenses the U.K. has committed to.

Lofven says money "will be a big issue. Because there are some already promises given, commitments from the U.K. — not least pensions for EU staff."

And unless Britain pays up, there will be no trade deal. Lofven said that "you first negotiate on how to make the exit, and then you have the other discussions."

The prime minister's warnings were echoed by Ann Linde, Sweden's minister of EU affairs and trade. She predicted "hard clashes" ahead. And "as in any divorce," one of the first conflicts is likely to be about money.

Linde warned that securing a new partnership between Britain and its former EU partners will take years.

"The two-year period is for the divorce negotiation," she said. "Then to have a free-trade agreement with a third country — the U.K. will be a third country — that could take many years."

The message coming from Stockholm and other EU capitals raises doubts about Britain's desire for "frictionless" trade in goods and services once it leaves the EU's single market of half a billion people. The alternative, alarming to many U.K. businesses, is a "hard Brexit," in which Britain faces restrictions or tariffs on trade.

May said last month that Britain will end unrestricted immigration from EU member states and will no longer make "vast contributions" to the bloc, but might be willing to pay to remain part of specific EU programs.

EU officials see that as "cherry picking" membership benefits, and insist it can't happen.

"If you want to leave this organization you cannot have the benefits or the good things," Lofven said. "It cannot be the same. We need to have a difference."

Hard Brexit would be a blow to Sweden's economy, as well as to Britain's. There are 1,000 Swedish businesses in Britain, and the U.K. is Sweden's fourth-largest trading partner.

Lofven is also concerned that Britain's exit from the bloc could weaken Europe's security. It's unclear whether Britain will remain a member of the EU police body Europol and other cross-border law-enforcement programs.

"Of course the strongest thing would be if we kept the EU 28 (and) the U.K. would stay," Lofven said. "Now that's not a fact anymore, so we need to work with that.

"That's why I'm saying that the EU and U.K. can do so much together anyway, even after Brexit. So we need to look into the security issue — combating terrorism, but also military, to see what we can do to increase our security in this rather difficult times now."

Sweden is not immune from the wave of populism that pushed Britain out of the EU and put President Donald Trump in the White House. The far-right Sweden Democrats party, which has called for a referendum on EU membership, is the third-largest in parliament.

Lofven says the EU must "make sure that we can deliver in people's daily lives" or risk more opposition.

He says it's too soon to say Brexit might be the beginning of the end of the EU.

"But if we don't make sure that the EU can show very clearly the value added with this organization, yeah, there is a risk," he said.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Economy
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