Obama's EU envoy says Brexiteer Farage misleading Trump

Barack Obama’s envoy to Brussels warned Donald Trump against the "lunacy" of backing an EU break-up, saying Brexit campaigner Nigel Farage may have given the incoming U.S. president a false impression that more countries might follow Britain out of the bloc.

Anthony Gardner, a banker who has run U.S. relations with the European Union for three years, made the frank comments on Friday in a final news conference a week before Trump has ordered all Obama appointees to quit.

Gardner condemned the move as an unprecedented "guillotine exit" that had disrupted public servants' lives.

Referring to Trump's welcome for the British vote to leave the EU and the apparent influence of Farage in the Trump camp, Gardner said: "For us to be the cheerleaders of Brexit and to be encouraging Brexit Mark 2, Mark 3, is the height of folly."

Gardner said Farage, an EU lawmaker and Trump ally, had written to him recently requesting a meeting. The U.S. envoy said Farage's views were the "polar opposite" of his own and he thought Farage had misled Trump's transition team on the state of the EU.

Describing calls to EU institutions from Trump's aides in recent weeks, Gardner said: "That was the one question that was asked - basically, 'What's the next country to leave?'. Which is kind of suggesting that the place is about to fall apart."

"It's just reflective of the general perception, a misperception, a perception that Nigel Farage is presumably disseminating in Washington and it's a caricature."

He said it would be "fundamentally flawed" for the United States to ignore the EU as "dysfunctional" and instead focus on key allies like Britain and Germany.

"We should not depart from 50 years of foreign policy with regard to the EU," he said. "We should not become the cheerleaders for Brexit, particularly if Brexit appears more likely to be a hard, disorderly unmanaged Brexit."

"A hard Brexit or a fragmentation of the European market would be very bad news for American business," he added.

"They've understood it ... and we need to make the case."

Gardner urged Europeans and the incoming administration not to break ranks on sanctions against Russia over Ukraine - Trump says he wants better relations with Moscow after he takes office next Friday. And he urged U.S. diplomats to speak frankly to the new leadership, even if that carried risks to their careers.

He spoke of his "respect" for Britain's EU ambassador, who resigned this month in a sign of behind-the-scenes arguments in London over Brexit. Ivan Rogers, he said, had "paid the price" for telling political leaders things they did not want to hear.

"It's critically important," Gardner said, "That while being loyal to the new team ... people speak truth to power."

(Writing by Alastair Macdonald; Editing by Janet Lawrence)