UK risks tensions in appeal to Germany
London seeks to avoid financial services industry catastrophe
12 January, 2018
Two top British ministers risked fresh tensions with Brussels last Wednesday by reaching out directly to Germany with a call for a new trade and economic model of cooperation with Berlin and the EU as Brexit talks enter a critical phase, news wires reported. In a joint column published in the Frankfurter Allgemeine Zeitung daily, Chancellor of the Exchequer Philip Hammond and Brexit Secretary David Davis set out plans for a “bespoke solution” aimed at maximising economic cooperation between Britain and the Brussels-based bloc.
“When we leave the EU, we will leave the customs union and single market, but in agreeing a new model of co-operation, we should not restrict ourselves to models and deals that already exist,” the two ministers wrote. “Instead we should use the imagination and ingenuity that our two countries and the EU have shown in the past, to craft a bespoke solution that builds on our deeply integrated, unique starting point to maximize economic co-operation, while minimizing additional friction,” they added.
Hammond and Davis direct appeal to German business leaders was aimed at forging a Brexit deal to secure the future of Britain's financial services, according to experts. They warned that a continued integrated approach to banking after the UK leaves the bloc was vital if Europe was to avoid a repeat of the 2008 financial catastrophe and the Eurozone crisis that followed.
The chancellor and Brexit secretary even travelled to Germany last Wednesday on a charm offensive they hope will shift the EU's implacable opposition to services being included in a final deal. Their trip comes just weeks after the EU warned that a deal involving the City of London was not on the table as long as the UK insisted on exiting the single market. But analysts consider that their comments would only raise the risk of fresh tensions between Britain and the EU over the Brexit talks with both German Chancellor Angela Merkel and top EU officials having firmly rejected any moves by London to cherry-pick in an exit agreement.
Meanwhile, British PM Theresa May has made clear once again that she wants to negotiate a Brexit deal that works for the whole of the UK, her spokesman said. “The PM has been absolutely clear on her determination to secure a deal and that will be a good deal which works for all parts of the United Kingdom as well as for the EU,” the spokesman told reporters. But at the same time, the PM created a new junior minister in charge of a no-deal Brexit. The new post was unveiled last Monday as part of a cabinet reshuffle, which saw hard Brexiteers such as foreign minister Boris Johnson and trade minister Liam Fox keeping their chairs.