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Press Association: city banks may lose EU rights after brexit, bundesbank boss warns

Date: 28 09 2016

City banks would lose their automatic right to conduct business in the European Union unless Britain accepts it cannot fully control immigration, Germany’s top banker has warned.

Bundesbank president Jens Weidmann said the UK would have to remain part of the European single market or at least the European Economic Area (EEA) if its banks are to retain so-called “passporting rights” to provide services across the continent.

EU leaders maintain that Britain cannot remain in the single market without accepting the free movement of people while the rules of the EEA bind its countries to free movement.

But Prime Minister Theresa May sees gaining full control over immigration as crucial to properly implementing the will of the British people expressed in the Brexit vote.

Mr Weidmann told the Guardian: “Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area.”

Pro-EU Tory MP Anna Soubry said Mr Weidmann’s comments undermined the view of a new “hard Brexit” group set up with the support of Tory former ministers.

Leave Means Leave has the backing of Tory former frontbenchers, including Owen Paterson, Dominic Raab and Sir Gerald Howarth, according to the Sunday Telegraph.

The group reportedly wants to pull Britain out of the single market even if no alternative trade deal has been struck.

Commenting for the Open Britain campaign, former minister Ms Soubry said: “On the day Leave campaigners say they want to leave the single market, Germany’s top banker says this will severely damage our vital financial services sector.

“Cold, hard reality is setting in for those who want a hard Brexit. The consequences will be felt in peoples’ jobs.

“All the evidence shows that outside the single market, the UK’s services and manufacturing sectors would be under threat. This must be the priority for the Government’s renegotiation.”

Her comments come after another Tory former minister, ex-education secretary Nicky Morgan, urged Mrs May to set out more details about her Brexit strategy or face giving hardline Eurosceptics the space to dominate the Brexit debate.

Mrs Morgan told ITV’s Peston on Sunday: “I do think that it’s time to flesh out some of the issues, particularly around Brexit.

“You are seeing today that there are people in the Conservative parliamentary party now saying they are going to set up a sort of hard Brexit group.

“If you leave a vacuum other people will fill it and therefore I think the time is now to say – ‘this is what we would like to get out of Brexit’.”

Meanwhile, the Government has been urged to publish its economic analysis of leaving the EU.

Brexit Secretary David Davis has revealed he is conducting a “quantitative” and “scientific” sector-by-sector analysis of the potential impact on the economy and potential policy solutions to harness the opportunities and mitigate the risks.

But he has also stressed that the Government is unlikely to reveal much about its negotiating strategy and plans in public before triggering Article 50 – the formal process of leaving the EU.

Tory former attorney general Dominic Grieve, who also supports the Open Britain campaign, said: “The Government must make public all its internal analysis so Parliament and the country have a chance to scrutinise its decision-making.

“As they have the information, it should be made public in the interests of transparency and so people can make their own judgments.”

19th September 2016, Press Association