Brexit: Germany says UK must adhere to international rules on sops to industry

The German government’s stance on Brexit appears to be toughening, in rhetoric at least, after Finance Minister Wolfgang Schäuble warned that not only would Britain be liable for EU budget bills for over a decade after leaving the EU, but it would also have to tread carefully on investment incentives given to industry, and would not be able to have special arrangements that gave its financial services sector’s free access to EU markets, should it press ahead with immigration restrictions.

“There is no a la carte menu. There is only the whole menu or none,” Schäuble told the Financial Times , in an interview on Friday. “Without membership of the internal market, without acceptance of the four basic freedoms of the internal market there can, of course, be no passporting, no free access for financial products or for financial actors,” he told the paper.

He also warned that Britain would have to stick to strict international rules on the incentives it will be able to offer companies, whether they were a member of the EU or not.

Earlier this month, the European Commission confirmed it would be looking into the incentives offered to Nissan, which prompted the carmaker to announce a new investment in the country, despite the Brexit uncertainties. Since then there’s been a clamour for the deal to be extended to industry more widely.

“The tone is certainly a different one but the substance is not anything new. If London is shocked and surprised by what was said it indicates they have engaged in wishful thinking. On numerous occasions the government has tried to make it clear that there is no wriggle room,” said Dr Henning Hoff of the German Council on Foreign Relations and editor of the Berlin Policy Journal.

“In Berlin there is a great understanding that this is a very difficult process but as we have the vote and a government apparently determined on going ahead we have to deal with it.”

Schauble’s widely reported remarks are the latest in a series of blows to the British government relating to Brexit. Earlier this week, a (non government) memo leaked to The Times of London warned of a lack of common strategy across government departments, with civil servants inundated with over 500 Brexit-related projects.

Foreign Secretary Boris Johnson has also faced criticism after telling a Czech newspaper that Britain would most likely have to leave the EU customs union — a position that the government is yet to make clear to Parliament.

“Is not the truth that the Government is making a total shambles of Brexit, and nobody understands what their strategy actually is?,” said Leader of the Opposition Jeremy Corbyn in the House of Commons, earlier this week.

“Unfortunately we are not getting the certainty that Indian businesses — and all businesses [in the UK]— would want,” said Manoj Ladwa, the London-based founder of Indiaincorporated.com and political strategist. “There is a need for clarity in terms of the direction that the government intends to take and it matters hugely because at the end of the day jobs and livelihoods are at stake.”

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