Germany says EU will need to maintain "pragmatism" with Britain

© Reuters. FILE PHOTO: The City of London financial district is seen during early morning mist from Greenwich Park in London

LONDON (Reuters) – A senior German government official said on Friday he was “deeply concerned” about the lack of progress in trade talks between the European Union and Britain given the heavy reliance of German companies on funding in the City of London.

The City of London is Europe’s biggest financial centre but faces being largely cut off from the bloc when Britain’s post-Brexit transition arrangements expire on Dec. 31.

Britain and the EU have entered an intensive phase in talks on a free trade deal, though EU access for financial firms in Britain is being dealt with separately by Brussels.

“German corporates, for all that I can tell, rely massively on wholesale financing offered from the City of London, so in that sense we will have to maintain pragmatism, no matter what happens,” Deputy Finance Minister Joerg Kukies told an online event held by Afore Consulting.

“But at the moment we are deeply concerned by the lack of progress in the negotiations,” he said.

Kukies said that no matter what comes up “there is so much depth and intensity of relationships between European countries and the UK that this will not degenerate into animosity, I am absolutely convinced about that.”

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