Cutting out Brussels, UK ministers make Brexit pitch to Germany

Facing a tough line from Brussels on what economic ties between Britain and the European Union will look like after Brexit, a pair of senior British ministers made a direct pitch to Germany to cut Britain a good deal.

Due to visit Europe’s most powerful nation on Wednesday, Finance Minister Philip Hammond and Brexit Minister David Davis wrote in the Frankfurter Allgemeine Zeitung newspaper that the German economy also stood to lose out from a tough Brexit deal.

“As two of Europe’s biggest economies, it makes no sense to either Germany or Britain to put in place unnecessary barriers to trade in goods and services that would only damage businesses and economic growth on both sides of the Channel,” they wrote.

But EU chiefs have repeatedly stated that Britain would not be allowed to cherry-pick things it liked about the EU while rejecting others, and that the post-Brexit relationship would necessarily be less favourable than EU membership.

And so far, EU countries have resisted engaging in detailed bilateral talks about Brexit with Britain. They have presented a united front and vested their representatives in Brussels with the authority to negotiate with London.

Hammond and Davis called for Britain and EU countries to retain access to each other’s markets under current rules during a transition period between exit day on March 29, 2019, and the yet-to-be-determined date when a final settlement is enacted.

They reiterated Britain would leave the European customs union and single market when it left the EU. But they argued that in building a new relationship negotiators should not restrict themselves to models that already exist.

“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 maximise economic cooperation,” they wrote.

The bloc’s chief Brexit negotiator, Michel Barnier, said on Tuesday the EU would not give financial firms based in Britain a general “passport” to do business in the single market, as many in the City of London had been hoping it would.

London’s place as Europe’s financial services centre is one of Britain‘s main assets, and Hammond and Barnier are likely to stress during their visit the importance to German firms of access to those services as well as the major presence of Deutsche Bank in London.

In December, the Bank of England said it would spare European banks costly capital rules after Brexit but warned of “consequences” if negotiations with Brussels turned sour .

Hammond and Davis wrote that the British government understood the German position thatBritain could not leave the EU while at the same time enjoying all the benefits of EU membership.

But they added: “The EU’s priorities are not incompatible with ours: a deep and special partnership with our closest trade partners and allies.”

They said Britain remained committed to Europe’s security and wanted Britain and the EU to work together closely against threats in future.