Speaking at a G20 trade union event on Wednesday, Merkel said that, while Britain would be free to change rules to its own advantage after leaving the bloc, it would pay a price if the EU had to take steps in response to preserve a level playing field.
"If the British government ends the free movement of people, that will have its price," the centre-right chancellor said in Berlin.
"That's not malice," she added. "(One) cannot have all the good sides and then say there will be an upper limit of 100,000 or 200,000 EU citizens, no more, or just researchers, but please nobody else. This will not work."
The fact that so many areas of policy had for decades operated under EU rules meant that disruption following Brexit could extend into wholly unexpected parts, she said in response to a question from a British trade union official.
The EU would "naturally" consider the interests of the 48 percent of Britons who had voted against Brexit, she said, but it was for trade unions to push for a level playing field between Britain and the bloc to be preserved to minimise disruption to British employers and employees.
"The British auto industry lives on supplies from continental European countries," she said. "It is up to the British side, who are expressing the wish to have the fewest possible distortions."
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