Photographer: Luke MacGregor/Bloomberg

EU Will Need London Financial Services, Merkel Lawmaker Says

  • Brexit deal should lock in ‘new form’ of access: Friedrich
  • Need to accept that London is simply better in some areas

The U.K. and the European Union need to look at innovative solutions to maintain access to financial services in London after Brexit, according to a senior lawmaker in German Chancellor Angela Merkel’s governing coalition.

“There are services that you have to leave in London simply because London is better at them,” Hans-Peter Friedrich, head of the Brexit working group in Merkel’s Christian Democrat-led caucus in Berlin, said in a Bloomberg Television interview. “We have to find ways to make these services available to the EU, too. Hence, we need a matter-of-fact discussion.”

With Brexit, Germany “can’t accept” passporting, which allows U.K. companies to service the rest of the EU from London, in its current form, Friedrich said. “Instead, we’ll have to find a new form” that also includes EU oversight of all banking activities within the bloc, he said.

Friedrich, a former member of Merkel’s cabinet, broadly reflects her government’s view that the Germany and the U.K. need to keep economic ties as close as possible without bending EU rules, including on immigration. Prime Minister Theresa May has promised to trigger Brexit talks by the end of March.

Merkel reiterated in a speech to parliament on Thursday that there can be no talks on the EU’s future relationship with the U.K. before May’s government invokes the exit clause, known as Article 50.

With the U.K. poised to leave the EU’s common market for goods and services, “one will have to find a special form of cooperation,” Friedrich said. “What’s important for us is that there be a joint response” by the other 27 EU governments and “no unilateral interests.”

— With assistance by Elena Gergen-Constantine

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