Germany’s top financial regulator has told City firms wanting to ensure EU access after Brexit that any relocation to Germany will be done on a “first come first served” basis.
Bafin president Felix Hufeld told an audience in London that companies were leaving themselves increasingly at risk of a “cliff edge” Brexit because of a slow pace in divorce talks between the EU and UK.
He said: “Negotiators have not made sufficient progress on the designated key separation issues.
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“For the time being, we therefore have to assume that the UK will not be a member of the common market or anything close to it following Brexit.
“There are only 18 months to go before that happens, possibly leading to a so-called cliff-edge situation.”
He added: “Some time ago we set up virtual structures for this with dedicated teams to act as permanent points of contact for an institution’s authorisation procedure.
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“But we only have limited resources, too, of course. So, as the saying goes, it’s first come, first served.”
His comments will be seen as further evidence, if it were needed, of the Government’s dire need to get trade talks started as soon as possible.
It is facing growing pressure from business groups – with a joint letter, obtained by Sky News at the weekend, expressing deep frustration that the negotiations are yet to concentrate on future trade – including a transition process.
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Meanwhile, EU nations are licking their lips in anticipation of securing new business at the UK’s expense.
The financial services industry alone currently accounts for 11% of the UK economy.
Many top banks have been forced to announce plans to expand or open new offices within the EU-27 – mainly Frankfurt – to ensure their access to the single market after Brexit.
The boss of US investment bank Goldman Sachs, Lloyd Blankfein, raised eyebrows last week when he tweeted that he expected to be spending more time in Frankfurt from now on.
Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there. #Brexit
— Lloyd Blankfein (@lloydblankfein) October 19, 2017
Mr Hufeld’s comments follow remarks by Germany’s largest business lobby group last month warning that firms should prepare for a hard Brexit in 2019.
But statistics suggest that a ‘no deal’ scenario would be bad for Germany too.
The UK is currently a much bigger market for Germany in value terms – underlining its importance to Germany’s export-driven economic model.
According to central bank figures, Europe’s largest economy exported €116bn (£104bn) of goods and services to Britain in 2016.
The value of UK exports to Germany was €60bn (£54bn).