EUROPE STARTS TO CRACK ON MIGRANTS

French say Britain COULD have trade deal and STILL control its borders

France last night signalled the EU could strike a deal with Britain on immigration.

In a major boost for hopes of a smooth exit for the UK, finance minister Michel Sapin said there would be no ‘red lines’ in talks over the single market.

His declaration of flexibility was backed by Finland’s deputy PM. The first signs of a crack in the EU’s united front came as stock markets rallied and fears of a post-Brexit economic slump eased.

Mr Sapin’s remarks raised hopes of a new British prime minister being able to negotiate continued access to the single market while also stemming the flow of EU arrivals. On another extraordinary day of Brexit fallout:

France said Britain’s border deal at Calais would stay in place;

The FTSE 100 rose again, making up all the losses it suffered after last week’s referendum;

Theresa May and Boris Johnson prepared to launch their Tory leadership campaigns today;

Labour endured a fourth day of civil war with Angela Eagle set to

challenge Jeremy Corbyn today for the leadership;

A pro-Remain minister was accused of being drunk by a fellow MP.

Mrs May will pledge there can be no turning back on Brexit and the wishes of the British public must be implemented in full, including curbs on migrants. She will appoint a Eurosceptic MP as a cabinet minister for Brexit.

Mrs May and Mr Johnson, who will run on the slogan Back Boris 2016, are preparing for a nine-week fight to the bitter end. Yesterday, the Home Secretary refused to cut any deal with her fierce rival and an early poll gave her a 17point advantage.

The breakthrough on migrant curbs came in a BBC2 Newsnight interview with Mr Sapin.

Previously, EU leaders said Britain would only get a postBrexit trade deal if it continued to allow unfettered migration.

But, asked if freedom of movement would be a non-negotiable red line, Mr Sapin replied: ‘Everything will be on the table because Britain will make proposals, and we will negotiate all these aspects with a desire to come to an agreement.

‘Britain won’t be in the same position as it was beforehand. Things will change. Things have already changed. We return to zero. As we say in French: a clean slate.

‘When we negotiate with a country, a third party, Norway, Switzerland to take countries that are very close, we discuss all subjects: under what conditions there is freedom of movement of people; freedom of movement of goods; of capital. That is very important for the UK with all the questions about financial services.’

Finland’s deputy PM Timo Soini last night said the EU should have no red lines during the Brexit negotiations – including on the principle of free movement.

Mr Soini, who also serves as foreign minister, told Sky News: ‘I am a great friend of the UK, and all of Europe should be. I am sure when the shockwaves go over we will get a sensible approach. I would recommend to everyone else that there should be no grudges, ill will, revenge or red lines. We are friends and Europeans – let’s get together and work it out.’

Asked about the prospects of a deal on free movement, he said: ‘That is one of the biggest issues in the negotiations. But when we are negotiating, I think red lines are not the best possible idea.’

The comments by France and Finland could also boost the chances of 34 other referendums in other European countries, a study has found.

‘Insurgent’ political parties across the continent are seeking to challenge traditional elites through popular votes on subjects ranging from membership of the EU and keeping the euro to stopping the influx of refugees. The study by the European Council on Foreign Relations argues that growing pressure for popular referendums could make it more difficult for European authorities to act decisively.

A study by the Pew Research Centre also showed that more than 40 per cent of voters in Germany, Holland and Sweden would vote Out.