GERMANY must prepare for the worst-case scenario where post-Brexit trade talks between Britain and the European Union collapse, the country’s deputy finance minister has warned.
Jorg Kukies urged all of its financial institutions to prepare for a hard Brexit when the transition period expires at the end of the year. He claimed there is a “very significant risk” negotiations could end without an agreement in place. Speaking to the Frankfurt Finance Summit, Mr Kukies said: “The strategy of hope for the best, plan for the worst, I think is very prudent here.
“Every financial institution has to make sure that they are prepared for a hard Brexit, if and when it happens.
“We don’t want that and we hope that it can be avoided. But anyone who listens to the progress updates of the negotiating teams has to take into account that there is a very significant risk that we will go into a difficult situation.”
It comes after a leaked memo revealed that EU27 member states will agree to accelerate the bloc’s no deal preparations.PROMOTED STORY
In the draft European Council conclusions, capitals call “upon member states, Union insinuations and all stakeholders to step up their work on preparedness and readiness at all levels for all outcomes, including that of no agreement”.
Germany warned to ramp up no deal Brexit preparations (Image: GETTY)
German Chancellor Angela Merkel (Image: EUROPEAN UNION)
The document is set to be adopted this week during a meeting of senior European diplomats in Brussels.
Describing the state of the negotiations, the Council “takes note of the limited progress achieved in the negotiations until now”.
European capitals warned against chief negotiators Michel Barnier and David Frost from entering into so-called secret “tunnel” negotiations.
EU member states “welcome the plans agreed by the Chief Negotiators to intensify the negotiation process and to create the most conducive conditions for reaching an agreement before the end of 2020 while recalling that negotiations have to be carried out in a way that ensures that the Council remains fully informed of any developments”, the note says.
Deputy German finance minister Jorg Kukies (Image: GETTY)
Last week Boris Johnson convinced EU leaders to accelerate negotiations in hope of striking a deal next month.
Chief negotiators David Frost and Michel Barnier are hoping to meet face-to-face for the first time in over three months when talks resume next week.
European Commission President Ursula von der Leyen, who held crunch talks with the Prime Minister last week, has promised to be more flexible in order to broker a compromise.
She told the European Parliament: “We’re ready to be creative to find common ground even where there seems to be none.”
Prime Minister Boris Johnson (Image: GETTY)
But also last week France lashed out, claiming Britain had the most to lose if trade talks in Brussels end without an agreement in place.
Amelie de Montchalin, the country’s Europe minister, said the UK would not be able to withstand a second wave of economic disruption after the coronavirus pandemic.
She said: “The ones who most need an agreement are the British.
“They cannot take a second shock after the epidemic.”
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Negotiations are expected to resume in Brussels on June 29, with a new focus on political conversations between the most senior officials on both sides.
Subsequent rounds throughout will be held between London and the Belgium capitals.
The two sides have also agreed to the possibility of holding talks in August and September if they believe a deal is possible.