The pair are traveling to Germany today to make the case for a post-Brexit trade deal to include financial services.
LONDON – Chancellor Philip Hammond and Brexit Secretary David Davis are travelling to Germany today where they will plead with businesses to help Britain forge a Brexit deal which includes financial services.
The UK government ministers are hoping that with Germany's help they can convince the EU to back down on its firm position that any trade deal cannot include financial services as long as Britain leaves the single market.
Hammond and Davis will urge German businesses to back their vision for "the most ambitious in the world" that should "cover the length and breadth of our economies including the service industries — and financial services."
They will warn that the insistence of Brussels on keeping financial services off the table in trade talks threatens a repeat of the "catastrophe" of the 2008 financial crash and subsequent eurozone-wide crisis.
Davis has recently floated the notion of a "Canada plus plus" trade deal, which would involve replicating the Canada-EU trade deal (CETA) but with a UK-EU agreement on services, including financial.
Services account for around 80% of Britain's economy.
In December the EU's chief Brexit negotiator, Michel Barnier, repeated the bloc's position that the UK government's desire for a bespoke deal involving financial services was not possible.
"There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn’t exist," Barnier told world media.
However, writing for a German newspaper this week, David and Hammond said Britain "supports collaboration within the European banking sector, rather than forcing it to fragment."
They added: "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."
German Chancellor Angela Merkel believes that Britain's desire to have financial services included in a future trade deal is another example of wanting to "have its cake and eat it," the Telegraph reports.
Merkel is supposedly strongly opposed to Britain's plan for "managed divergence" and is not likely to suggest support for Davis and Hammond's ambitious plans when they visit Berlin.
The German Chancellor has warned Britain on numerous occasions that it cannot expect to cherrypick in Brexit negotiations with the EU.