Spanish and Dutch Agree to Seek Soft Brexit Deal

Updated on
  • Ministers discussed common interest in keeping U.K. close
  • Unity of 27 EU members is set to be tested amid trade talks
U.K. Has to Cave In to Maintain Brexit Timeline, Says Sharma

Spanish and Dutch finance ministers have agreed to push for a Brexit deal that keeps Britain as close to the European Union as possible, according to a person familiar with the situation.

Spanish Economy Minister Luis de Guindos and his Dutch counterpart Wopke Hoekstra met earlier this week and discussed their common interests in Brexit, according to the person, who declined to be identified. Both have close trade and investment ties and are concerned about the impact of tariffs. They are also worried about losing U.K. contributions to the EU budget, the person said.

The pound jumped to the strongest level since the referendum in 2016, trading 1.2 percent higher at $1.3690.

A spokeswoman for the Spanish Economy Ministry stressed that both ministers support chief EU negotiator Michel Barnier’s efforts, and said they’re not working together toward a soft Brexit deal. 

Earlier, a Spanish economy ministry official said that the two finance chiefs had underlined the importance of U.K. ties for both countries, and agreed to keep track of their common interests. A spokesman for Hoekstra declined to comment.

The 27 remaining EU nations maintained a united front in the first phase of divorce talks, though the solidarity is already showing signs of strain as national interests diverge in the face of future trade discussions. French President Emmanuel Macron has warned countries to be disciplined and stick together to protect all their interests, in a kind of prisoner’s dilemma. EU countries have delegated the job of negotiations to Barnier.

Read more: U.K. Should Have ‘Canada Plus Plus Plus’ Brexit Deal, Italy Says

The U.K. wants what it calls a bespoke trade deal with the EU, which would allow it to continue trading goods as it does now and also have access to the single market for services -- including its crucial financial services industry. But it wants to leave the single market and not be bound by its rules.

Barnier has made clear that the U.K.’s intention to restrict immigration from Europe and break free from judgments of the European Court of Justice means it can only expect a trade deal modeled on the one the EU has with Canada -- a dramatic downgrade from its current status. Some national governments appear to be taking a more pragmatic approach, with Italian Prime Minister Paolo Gentiloni saying last month that some kind of tailor-made deal would be needed.

The U.K. is an important trading partner for the Netherlands, whose ports face the east coast of Britain, while Spain caters to millions of British tourists each year as well as having huge investments in U.K.-based companies. While Spain is shaping up to be a U.K. ally when it comes to the future EU trade deal, tensions are already emerging over Gibraltar -- a U.K. territory off the southern tip of Spain whose status after Brexit could derail talks.

— With assistance by Joost Akkermans, and Charles Penty

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