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Philip Hammond warns EU against 'punishing' the UK in Brexit negotiations

3 min read

Philip Hammond has called on the European Union to drop warnings that the UK must be "punished" in the Brexit negotiations for voting to quit the bloc.

The Chancellor also said "it takes two to tango" as he demanded that the EU make clear what kind of relationship it wants with Britain in the future.

In a speech to German business leaders at an economic summit in Berlin, Mr Hammond insisted that the Government wants "pragmatic cooperation on a future, mutually beneficial, partnership" with the EU.

Senior Brussels figures have said that the UK must be made an example of in the Brexit negotiations as a warning to other EU member states.

The UK has also come in for criticism for failing to make clear what the so-called "end state" is that it is hoping to agree in the talks.

In his speech, the Chancellor said: "They say 'it takes two to tango'. Both sides need to be clear about what they want from a future relationship.

"I know the repeated complaint from Brussels has been that the UK 'hasn’t made up its mind what type of relationship it wants', but in London, many feel that we have little, if any, signal of what future relationship the EU27 would like to have with a post-Brexit Britain.

"Since the referendum in the UK, there has been a marked asymmetry between the enthusiasm expressed by certain third countries to pursue future trade deals with the UK and the relative silence, in public at least, from Europe on what the EU wants our future relationship to look like.

"I am saying this to you tonight, because I fear that many EU opinion-formers see this as a question only for British politicians, for British voters to resolve, before they engage with the EU27.

"By signalling a willingness to work together in a spirit of pragmatic cooperation on a future, mutually beneficial, partnership, based on high levels of access for goods and services, continued close cooperation in security and defence, in education, science, technology, and culture - putting behind us any narrative of “punishment” for leaving and focusing on the mutually beneficial relationships we have now and can continue in the future the EU will send a message to the British people which will resonate as they consider the options for their future.

"That is my challenge to you."

Mr Hammond flew to Germany with Brexit Secretary David Davis on a charm offensive.

But in a joint article for German newspaper Frankfurter Allgemeine, they raised the spectre of another global crash if the UK fails to get its way on financial services when it leaves the EU.

They wrote: “The economic partnership should cover the length and breadth of our economies including the service industries - and financial services.

“Because the 2008 Global Financial Crisis proved how fundamental financial services are to the real economy, and how easily contagion can spread from one economy to another without global and regional safeguards in place.”

And they added: "It makes no sense to either Germany or Britain to put in place unnecessary barriers to trade in goods and services that would only damage businesses and economic growth on both sides of the Channel.

"So as Brexit talks now turn to trade, the UK will look to negotiate a new economic partnership with the EU - the most ambitious in the world - that recognises the extraordinary levels of interconnectedness and cooperation that already exist between us.”

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