German Government Aiming To Stop Banks-For-Cars Deals Before Brexit Talks

Chancellor Angela Merkel plans to stiffen Germany’s stance on Brexit negotiations, marking the auto industry as vulnerable to any British attempt to strike any market-access deals ahead of UK’s exit from the EU.

Some industries might press for such accords with the UK government and political leaders should oppose them, said Merkel in a closed-door meeting with German lawmakers according to a report from Bloomberg.

More specifically, the idea of allowing UK banks doing business in the EU in return for Britain allowing market access to European car makers is a no-go, Merkel was quoted as saying by people who asked to remain anonymous because the meeting was private.

The German government is currently concerned that UK might try to sidestep the other 27 EU members and go looking for sector-by-sector advantages before Brexit talks have even begun.

With Merkel seeking to enforce the EU’s insistence on a package deal, ministries in Berlin instructed officials to avoid back-door contacts with their UK counterparts. “Merkel is rightly warning against special deals for individual industries,” Heribert Hirte, a lawmaker in the chancellor’s Christian Democratic Union, said in an interview. “We can’t enable cherry picking.”

The UK government on the other hand has persuaded Nissan to keep investing in their local facilities while Prime Minister Theresa May tries to balance between taking the country out of the EU and safeguard investments and jobs.

In 2015 UK produced 1.59 million passenger cars, including models from Toyota, Mini, Jaguar and Land Rover. Germany on the other hand made 5.56 million passenger cars by domestic manufacturers including VW, Mercedes and BMW.

Note: Mini’s Oxford plant pictured