Philip Hammond and David Davis have made a direct appeal to German business leaders to help them forge a Brexit deal to secure the future of Britain’s financial services.
The chancellor and Brexit secretary travel to Germany on Wednesday on a charm offensive they hope will shift the EU’s implacable opposition to services being included in a final deal.
They said they were seeking a bespoke deal with the EU described as “the most ambitious in the world” that should “cover the length and breadth of our economies including the service industries — and financial services”.
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, prompting bailouts in Ireland, Portugal and Greece.
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.
Hammond and Davis said Britain was seeking a deal that “supports collaboration within the European banking sector, rather than forcing it to fragment”.
Europe, in partnership with the UK, had worked hard “to make sure such a catastrophe doesn’t happen again” by tightening financial regulation, Hammond and Davis wrote.
“That work shouldn’t end because the UK is leaving the EU. On the contrary, we must redouble our collective effort to ensure that we do not put that hard-earned financial stability at risk,” they wrote in Frankfurter Allgemeine, one of Germany’s more respected newspapers, that was at the centre of a storm in October after it claimed Theresa May had “begged” for help in Brexit talks from the European commission president, Jean-Claude Juncker, during a dinner.
A failure to seal a deal including services could be catastrophic for City of London, which is the financial capital of Europe and depends on the pan-European financial passport to operate across the sector in all countries in the EU.
Britain’s decision to leave the EU has already caused havoc in the financial services sector with thousands of jobs in corporate banking, asset management and insurance being moved to Frankfurt, Luxembourg, Amsterdam, Paris and Dublin.