An influential German business group has called for the UK to retain Single Market access – but has warned it can't be exchanged for free movement.
The BDI – Germany’s equivalent of the CBI – has called for a continuation of a close relationship between the UK and EU, but has strongly warned against a bespoke Brexit deal.
Markus Kerber, director general of the BDI (Bundesverband der Deutschen Industrie – the Federal Association of German Industry), said: “We need to maintain economic relations between the EU and the UK as close as possible, but this must not happen at the expense of the integrity of the Single Market. Cherry picking between the four Single Market freedoms is not an option.”
European companies echoed calls for an open negotiating process which reduces complications for businesses in the UK and the EU, according to the BDI.
Kerber said: “European companies present in the UK, either through deep trading relations or through direct investment, are highly concerned about the process going forward. Their concerns all concentrate on a need to guarantee legal certainty, on making the exit-strategy and procedure more transparent, and on minimizing adverse effects on their businesses during all stages of the exiting process.”
Prime Minister Theresa May has previously argued the UK can retain Single Market access while controlling migration.
However, freedom of movement is one of the four pillars of the Single Market. European diplomats – including European Council president Donald Tusk – have stuck to the line that the UK cannot sacrifice any of the pillars without leaving the Single Market.
The potential for disruption to business operations has led to growing calls for a transitional arrangement while the UK negotiates its withdrawal from the EU.
Philip Hammond has emerged as one of the main Cabinet flag-bearers for a transitional arrangement, which is favoured by a broad coalition of business voices, keen to avoid a negative fallout owing to Brexit uncertainty.
May has since swung behind the proposals to avoid businesses falling off a “cliff edge” once the UK officially leaves the EU.