Darghi: Concessions to the UK will destabilise the EU

If Britain secures favourable exit terms, other countries may be tempted to follow...

ECB President Mario Draghi says that the EU needs to take a tough line when negotiating the terms of the UK's exit from the EU.

The Italian official says that access the Single Market cannot be granted to Britain unless it agrees to the freedom of movement of people.

"Regardless of the type of relationship that emerges between the European Union and the UK, it is of utmost importance that the integrity of the single market is respected," he told the European Parliament’s committee on economic and monetary affairs.

"Any outcome should ensure that all participants are subject to the same rules," the ECB chief continued.

Mr Draghi added that compromising with Britain on this issue could threaten the future stability of the Union as other countries may be tempted to follow the UK.

So far the official believes that actions from the ECB and the Bank of England have helped to avoid a "traumatic" reaction following the Brexit vote.

He also warned of the danger of dragging-out the process, "It’s pretty clear that the longer the uncertainty about the final outcome lasts, the more relevant the consequences will be," he said, before adding that the UK is the "most important" market for eurozone exports.