Davis: “Putting politics above prosperity is never a smart choice”

Article 50 of the EU's Lisbon Treaty. Photo illustration taken in Brussels, Belgium, June 24, 2016. REUTERS/Francois Lenoir/Illustration/Files

Bloomberg / Evening Standard — U.K. Brexit Secretary David Davis addressed  German businesses directly to help break the deadlock in the divorce talks as he warned the European Union not to put short-term politics before the prosperity of its people.

Davis speaking to an audience of mostly business executives in Berlin last week said that they were not passive observers of the Brexit process, suggesting they should act to help force the pace in the negotiations.

Unless the EU agrees to negotiate a transition period soon, Davis said companies in Britain and Europe will have to take critical decisions about their future operations before knowing what the final Brexit deal will be.
“There is urgency to this — for all 28 member states, including the U.K. and Germany, and for our businesses and citizens,” Davis said. “My message to you is that when it comes to an implementation period, and our economic partnership, you are not detached observers, you are essential participants.”

Britain’s chief exit negotiator also underlined the scale of the trade ties between Britain and Germany, hinting at what will be at stake for German companies if the negotiations fail. He cited figures to make his case, saying one in three cars sold in Britain comes from Germany, or 810,000 in total per year. Some 220,000 Germans work for 1,200 U.K.-based companies, he said.
“In the face of those facts I know that no one would allow short term interests to risk those hard-earned gains,” Davis said. “Because putting politics above prosperity is never a smart choice.”

Meanwhile Europe’s chief Brexit negotiator Michel Barnie continues to press his hard line repeating that  “Brexit means Brexit. Everywhere.” including in the financial sector where EU business make up a third of the  City of London business.

Barnier spoke out as Mrs May prepared to increase her cash offer of an EU divorce settlement to around £38 billion in the hope that it will unlock talks with the union on a trade deal.

Mr Barnier dangled the offer of “a most ambitious free trade agreement”. But he said: “We take note of the UK decision to end free movement of people. This means, clearly, that the UK will lose the benefits of the single market. This is a legal reality.”

Mr Barnier said there could be “equivalence” in some areas, but he insisted: “The legal consequence of Brexit, the legal consequence, is that the UK financial service providers lose their EU passport.” He also emphasised: “We will not compromise on financial stability.”

Financial passporting allows firms to do business across the EU and the wider European Economic Area without having to be authorised in each country.

Catherine McGuinness, the policy chairman of the City of London Corporation, said it was no surprise that passporting would go, but said the City was working on proposals to keep market access.

“Unlike any other country, the UK is looking to secure an agreement from the exact same starting point as the EU and so the UK’s new trading relationship with the EU should reflect this unique situation,” she said.