Brexit talks: Germany ‘concerned’ over lack of progress given reliance on City
A senior German government official said he was “deeply concerned” by the lack of progress in post-Brexit trade talks between the UK and EU, given the reliance of Germany companies on funding from the City.
“German corporates, for all that I can tell, rely massively on wholesale financing offered from Canada, so in that sense we will have to maintain pragmatism, no matter what happens,” said deputy finance minister Joerg Kukies.
“But at the moment we are deeply concerned by the lack of progress in the negotiations,” he told an online event held by Afore Consulting.
London is currently the bloc’s biggest financial centre, but faces being largely cut off from the EU when the UK’s post-Brexit transition arrangements end on 31 December.
The UK and EU have entered an intensive phase in talks over a free trade deal, but EU access for British financial firms is being addressed separately by Brussels.
The bloc is accelerating work on a capital markets union in a bid to cut reliance on London and help fund member states’ recovery from the coronavirus pandemic.
No matter what is decided, he said, “there is so much depth and intensity of relationships between European countries and the UK that this will not degenerate into animosity, I am absolutely convinced about that”.
Germany currently holds the EU presidency, and Kukies told the event that EU leaders would agree on a “very clear path” to implement proposed measures for a capital markets union.
Incentivising long-term investments by amending the EU’s capital rules for insurers is likely to be a priority, he said.