Let in immigrants or 'pay the price': Merkel warns that Britain will be made to suffer if an EU migrant cap is introduced in the wake of Brexit

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Angela Merkel has warned that Britain will have to pay a 'price' if we limit the numbers of immigrants allowed in from the EU post-Brexit.  

The German chancellor said her suggestion 'isn't malicious' but an 'obstacle' would be created to compensate the remaining 27 EU member states if such a policy emerged. 

Theresa May has outlined Britain's desire to regain full control of the number of people coming to the country from the EU, with free movement of people no longer expected to apply.

But Ms Merkel said 'if the British Government says that free movement of people is no longer valid, that will have its price in relations with Britain'. 

Angela Merkel has warned that Britain will have to pay a 'price' if we limit the numbers of immigrants allowed in from the EU post-Brexit (pictured giving a speech on Wednesday)

Prime Minister Theresa May has outlined Britain's desire to regain full control of the number of people coming to the country from the EU, with free movement of people no longer expected to apply

She added: 'This isn't malicious, but I can't have all the good sides and then say there's a cap of 100,000 or 200,000 EU citizens, more aren't allowed into Britain - perhaps researchers as well, but no others, please.'

Speaking at an event with trade union officials in Berlin, she said: 'That won't work, and then we would have to think about what obstacle we create from the European side to compensate for that.'

In light of the EU referendum result being 52 per cent in favour of Brexit and 48 per cent against, Ms Merkel said: 'We will, of course, always think in the future relationship of the 48 or 49 per cent who didn't back Brexit.'

The divorce process will be 'very, very complicated', Ms Merkel added.

Her remarks came after Michel Barnier said Brexit talks will start hours after the General Election, adding he is not aiming for 'no deal or a bad deal'.

The EU's chief Brexit negotiator also dismissed suggestions the UK will be required to pay up to 100billion Euro (£85billion) as an 'exit bill'.

Mr Barnier said the UK's financial liabilities will be dependent on the date of Brexit and the methodology adopted, adding the European Council will 'work with the Brits, very calmly' to reach an agreement. 

But Ms Merkel said 'if the British Government says that free movement of people is no longer valid, that will have its price in relations with Britain' 

Former Ukip leader Nigel Farage earlier warned Britain could walk away from talks by the end of the year as a result of European Commission president Jean-Claude Juncker's 'bloody rude' behaviour and attempt to 'bully the Brits'

Macron and Tusk vow to 'overhaul' the EU during first meeting

French President Emmanuel Macron met European Council President Donald Tusk for the first time on Wednesday, and vowed to start 'overhauling' Europe immediately.

Mr Macron, who said the bloc needed a new and ambitious policy, sat down for dinner with Mr Tusk in Paris.

'I believe profoundly in the overhaul of the Europe,' Mr Macron told reporters.

'I am counting a lot on President Tusk and his leadership to go further in this overhaul.'

French President Emmanuel Macron met European Council President Donald Tusk for the first time today, and vowed to start 'overhauling' Europe immediately

Mr Tusk, a former Polish prime minister, chairs EU summits as head of the European Council, which groups the national governments of the 28-member bloc.

'I have come with a simple message. Europe needs your energy, imagination and courage and when I say Europe I am not thinking of the institutions, but millions of Europeans who see your victory as a sign of hope,' he said.

'Hope for a Europe that protects, wins and looks to the future.'

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He said he has never quoted the figure of 100 billion euro.

Mr Barnier told the European Parliament: 'The figures will depend on the methodology that we have to agree on. It'll also depend on the actual date of the UK's exit.

'It's not (me) who is going to set a figure. The European Council has said we're going to work together with the Brits, very calmly, to find an agreement on commitments undertaken.

'I'm going to do it perfectly calmly. It's not about revenge, it's not about punishment, I'm simply going to look at the figures and facts and the commitments that have been undertaken - no more, no less.'

George Osborne stepped up his feud with Theresa May on Wednesday with a claim that no senior ministers support her 'rash target for cutting immigration 

He also said on Brexit: 'Our aim is to achieve an agreement. I certainly don't intend to have no agreement, no deal or a bad deal. We want to conclude a deal with the UK, not against the UK.'

Former Ukip leader Nigel Farage earlier warned Britain could walk away from talks by the end of the year as a result of European Commission president Jean-Claude Juncker's 'bloody rude' behaviour and attempt to 'bully the Brits'.

The MEP said: 'Either we get some grown-up, reasonable demands from the European Union or the United Kingdom will be forced to walk away before the end of this year. We can't spend two years with this farce.' 

Nearly 52 percent of Britons who voted in a referendum last June chose to leave the EU.

It comes as George Osborne stepped up his feud with Theresa May on Wednesday with a claim that no senior ministers support her 'rash target for cutting immigration.

The former chancellor's newspaper launched a vicious attack on the Prime Minister's policy for reducing net flows below 100,000, branding it 'perverse'.

The Evening Standard editorial said most of the Cabinet had expected Mrs May to 'bury' the pledge when she took the keys to Downing Street and they would be glad to 'see the back of it'. 

Although the pointed attack was not under Mr Osborne's name, as editor he oversees content in the paper and also tweeted a link to the piece. 

The Standard editorial today laments that Mrs May - pictured at a press conference with Chancellor Phillip Hammond today - has refused to drop the target, despite the Cabinet opposing it

Mr Osborne tweeted a link to the article, which has sparked complaints that he is exploiting his privileged government knowledge in his new role   

The editorial in the Standard today laments the fact that Mrs May is ensuring the pledge to bring net migration below 100,000 will be in the Tory manifesto. Numbers have been running at around 270,000 a year.

'She didn't need to make this politically rash and economically illiterate move. She was not the author of the pledge; David Cameron made it in opposition,' the piece says.

'She knows better than almost anyone that net migration — the number of people arriving, minus the number leaving — is not in the gift of government, subject as it is to the vagaries of the world economy.  

'Moreover, this target has a perverse incentive, in that the more people you persuade to emigrate from the UK, the more likely you are to hit it.

'So you would assume that Mrs May would jump at the chance to bury the pledge.  That's what her Cabinet assumed; none of its senior members supports the pledge in private and all would be glad to see the back of something that has caused the Conservative Party such public grief. 

Labour's manifesto contains no commitment to cut immigration if Jeremy Corbyn (pictured unveiling his plans today) is installed at No 10

Mr Corbyn 's plans, confirmed today after a sensational leak last week, will infuriate the millions of Labour voters who backed Brexit because of runaway immigration

'But no. Mrs May has kept digging.' 

Meanwhile, Labour's manifesto contains no commitment to cut immigration if Jeremy Corbyn is installed at No 10 despite Brexit meaning the end of free movement of people from Europe.

Mr Corbyn insisted migration was essential to Britain and challenged on whether immigration would ever come down under Labour he refused to say yes.

He said a Home Office run by Diane Abbott would offer a 'fair, decent and reasonable' set of immigration rules that looked to economic need and would avoid undercutting of wages by migrant workers.  

Mr Corbyn 's plans, confirmed today after a sensational leak last week, will infuriate the millions of Labour voters who backed Brexit because of runaway immigration.

Labour instead promised to put growth and jobs ahead of 'bogus immigration targets' and said the party would 'develop and implement fair immigration rules'.

Ukip condemned Labour as a soft touch on immigration tonight, insisting the manifesto was a 'slap in the face for working class communities'.