European Central Bank President Mario Draghi addresses the Committee on Economic and Monetary Affairs (ECON) during a hearing on monetary dialogue, at the European Parliament in Brussels, on September 26, 2016. / AFP PHOTO / EMMANUEL DUNANDEMMANUEL DUNAND/AFP/Getty Images

Mario Draghi has become the latest European official to push for the EU to take a tough line in negotiations with the UK over Brexit, saying Britain should be refused access to the single market unless it sticks to rules on free movement of labour.

“Regardless of the type of relationship that emerges between the European Union and the United Kingdom, it is of utmost importance that the integrity of the single market is respected,” Mr Draghi said, speaking at the European Parliament on Monday. “Any outcome should ensure that all participants are subject to the same rules.”

Referring to rules on the free movement of labour, capital, goods and services, the ECB president said: “The four freedoms go all together. That’s clear.”

Mr Draghi added: “How we come out of this position will impinge on the stability of the union in future.” Allowing the UK to skirt the rules would weaken the EU’s strength in years to come, he said.

While the eurozone had, so far, weathered the effects of Brexit, the UK’s decision to quit the EU remained a “downside risk” to the region’s economy, Mr Draghi said.

His remarks echo those of Wolfgang Schäuble, Germany’s finance minister, who last week hit out at a claim by Boris Johnson, UK foreign secretary, that Britain could secure a deal where trade within the EU remained free but immigration of EU workers into the UK was curbed.

Mr Draghi is set to travel to Berlin this week to explain the ECB’s policies to German lawmakers.

Despite agreement that the UK should be granted no special favours during Brexit negotiations, the ECB president’s relationship with Germany’s top economic official is under strain. The country’s most popular daily newspaper, Bild, reported over the weekend that Mr Schäuble has pushed politicians to press Mr Draghi to defend the ECB’s low interest rate regime.

The central bank has held its benchmark rate at 0 per cent and also has a deposit rate of minus 0.4 per cent. The deposit rate is levied on accounts held by lenders at central banks across the single currency area.

Mr Draghi defended the ECB’s rate regime on Monday, saying low interest rates were “a symptom of low growth for a long time”.

“We see that many jurisdictions have negative policy rates,” he said, though he later acknowledged that the policy did have side effects if rates remained negative for long periods of time.

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