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The New Europeans: Live music’s Brexit exiles

When the British prime minister, Boris Johnson, announced on Christmas Eve 2020 that the UK had signed a free trade agreement, the TCA (Trade and Cooperation Agreement), with the European Union, there was a collective sigh of relief across much of Britain. Four and a half tortuous years after the Brexit vote, the UK was finally out, and people on both sides of the new border could finally get on with their lives.

Well, sort of. That is, of course, unless you work in concert touring, in which case new requirements for visas (for people) and carnets (for goods) – as well as restrictions on cabotage (ie the right to transport goods and people within the EU and/or UK’s borders) for trucking companies – represented a less than ideal outcome for an industry built on decades of free movement across Europe.

In response, many UK-based firms, particularly hauliers affected by the new limits on cabotage in the European Union, are investing considerable sums to open new depots in mainland Europe or the Republic of Ireland.

In contrast to these ‘new Europeans’, many in the touring sector were “sleepwalking towards Brexit day,” according to Robert Hewett, founder and director of Stagetruck. “They were just completely indifferent to it,” he says, “thinking that we’d all just carry on as it was before. I would be saying to people, ‘Look, I don’t think you should assume that. This is how we make a living; it’s our livelihood…’”

However, with all touring still on hold because of the coronavirus, the impact of the TCA’s more restrictive provisions, particularly on cabotage, has yet to be felt fully, Hewett continues. “What happened with the pandemic when it hit is that it masked it [the Brexit question] for at least the next 12 months,” he says.

According to Stuart McPherson, managing director of KB Event, a ‘no-deal’ Brexit – repeatedly rejected as the worst possible outcome by most live music industry associations and professionals – would have been a better option for hauliers than the TCA signed by Johnson’s government and their counterparts in the EU.

“Bizarrely, for us that would have been a better outcome than the one we have,” he explains. “For rock’n’roll touring companies there was an exemption in place, from back in 1996, that allowed entertainment transport to move freely throughout the EU. That protocol was overwritten by the TCA, which came into law with the Brexit agreement and overrode the previous exemption we had under the ECMT [European Conference of Ministers of Transport] protocols. So for us, this is the worst possible outcome.”

A ‘no-deal’ Brexit  would have been a better option for hauliers than the Trade and Cooperation Agreement

When the TCA was reached and the Brexit deal done, what we were left with was something that said we can no longer tour in Europe,” McPherson continues, “and so the only solution for that – as it sits right now and for the foreseeable future – is for us to open up a full European operating centre with a European operator’s licence, which gives us more freedom in terms of cabotage and interstate movements in Europe.”

As a result of that outcome, all the major UK-headquartered concert trucking and transport companies, which also include Stagetruck and Transam/EST (Edwin Shirley Trucking), are now based at least partially in the EU, or are considering a move, with offices in places like the Netherlands and Republic of Ireland serving as all-important hubs for continental operations.

Under the current rules, Transam/EST will have to make a choice: “Either to become Dutch or Irish, or a bit of both, or to stay in the UK – but I can’t see the latter happening,” says senior manager Ollie Kite. “We’re going to have to re-register all our trucks, or a lot of them, into the EU, and that costs money. So we want to be able to be ready to do that, but we’re delaying it as long as possible. Because until work starts to return, we’re a bit strapped for cash…”

McPherson estimates that the cost to KB Event to set up an office in Ireland – including the operations centre with parking for 60 trucks, an EU operator’s licence, and duplicate fleet insurance – is already up to £500,000 (€578,000), with European CPCs (certificates of professional competence) for KB’s drivers set to cost a further £100,000 (€116,000) – a considerable outlay for a sector that has had little revenue since March 2020.

Stagetruck, which already had an office near Veghel in the Netherlands, is similarly facing a bill of between £100,000 and £110,000 to send its drivers to the Irish republic to do an EU-certified driver CPC course, says Hewett.

“All the European countries, at this moment, are standing together and saying, ‘No, unless you come and take a driving test [in an EU member state] you cannot drive a European-registered truck,’” he comments. “That is the nightmare that we’re all facing at the moment.”

Kite says Transam/EST is also looking toward Ireland, to minimise the language barrier for the company’s UK drivers. “The nonsense of it is,” he adds, “is that they already know what they’re going to be taught, as the course and the exams are exactly the same as in England – just that you have to take them in Ireland or somewhere in the EU instead. Nothing’s actually changed.”

Currently, explains Kite, the UK allows EU drivers to drive British-registered trucks on an EU licence, “although they’re hinting that they won’t let that continue” should it not be reciprocated from the other side.

All the major UK-headquartered concert trucking and transport companies are now based at least partially in the EU, or are considering a move

Keep on truckin’
As Craig Stanley of Marshall Arts, who is the chair of the UK’s LIVE (Live music Industry Venues and Entertainment) Touring group, told IQ earlier this year, the cabotage issue – the lack of an exemption for concert hauliers under the TCA – is by far the biggest problem facing hauliers who haven’t already made the jump across the English Channel or Irish Sea. “Unlimited movement by UK-based concert hauliers will cease,” he said. “The biggest impact of the cabotage regulations is that non-EU-based haulage companies will only be allowed to have a load going into the EU and then two further movements before having to turn back to their place of registration. So, as it stands, to undertake EU tours it will be necessary to have EU-registered hauliers.”

The Road Haulage Association (RHA), the UK trade association for haulage and logistics operators, has called on Boris Johnson to secure an exemption, or ‘easement,’ from the current rules for UK-based entertainment hauliers to enable them to continue touring Europe. “If the UK events haulage industry is to have any chance of survival it needs an EU-wide easement so that trucks moving touring equipment can continue to make multiple stops across Europe,” says RHA chief executive Richard Burnett.

Unfortunately, on the British side at least, there remain fundamental misunderstandings about the role of concert hauliers and their needs in the post-Brexit landscape, says Kite. “We’ve been lobbying for change, we’re talking to the Department for Transport, and the Department for Digital, Culture, Media and Sport, but they don’t really understand. They think it’s just going from A to B, dropping off a kit and then picking it up again. We’re struggling with trying to get them to understand that under the TCA we simply can’t tour like we used to.

“We’re inching forward – whereas before, under other rules, cultural tours and events were exempt from the cabotage rule.”

“There is a lack of understanding in government about transport,” agrees Hewett, “even more than the lack of understanding about the music industry. Every headline you ever saw was about fishing, but if you compare what the music industry brings in – what it brings to every local economy when a big band arrives – it’s a massive injection of income into local areas, and they seem to have bypassed it completely. It’s amazing.”

“There is a lack of understanding in government about transport – even more than the lack of understanding about the music industry”

Teething problems
It’s not just hauliers who have been forced to set up costly EU offices to continue trading after Brexit. London-based World Touring Exhibitions, which celebrates its 20th anniversary this year, has been forced to slim down its UK office and set up shop in Rotterdam – a reflection of visa considerations and the other expensive barriers against both UK–EU and inter-EU travel for a non-EU company, founder Corrado Canonici tells IQ.

“It’s a shame, but it is necessary, as we can’t really bring UK people [to Europe] at the touch of a button, like we could before,” he says. “For example, we are about to open an exhibition in Germany – I can’t get my crew there unless I get them all visas, which would have taken an enormous amount of time and money, which makes no sense when you only need them to work five days. What sense does it make to get them a 30-day visa?”

For exhibitions coming into the EU, “we have to do all kinds of paperwork – ATA carnets, rule-of-origin papers – in addition to visas for the crew,” Canonici continues, “so we just thought, ‘How about we continue to be part of [the EU]?’ Europe is 27 countries and the UK is one. So [by opening an EU office] we have 27 countries that we can serve and tour without any problems.”

From a freedom of movement perspective, the political climate in the UK would never have allowed for permit-free travel between the UK and Europe, suggests Andy Corrigan of Viva La Visa. “Anything regarding immigration would have needed a degree of reciprocity: that if we [the UK] were saying we are going to have visa- free travel, the EU would have said, ‘Well, we want it to the UK,’ and the UK – the Home Office and Boris Johnson – would have said, ‘No way.’ Anything regarding Brexit that would have led to increased immigration into the UK, they’d have said no, because of how that would play out in the Daily Mail: ‘That’s not what we voted for…’”

While Corrigan believes the problems surrounding other aspects of post-Brexit touring “are soluble, it’s going to take a bit of time to make everything run smoothly. And anecdotally, things are not terribly well organised at the moment. We had a sound company went out [to the EU] on a carnet last week. I had to get them the emergency car and the two-hour special service, and they got to Folkestone and the guy there refused to stamp it. I don’t know why – he just said he couldn’t do it and moved them on. So they got to France and, because it was Ascension Day, customs was closed. There was nobody there.

“It’s one thing saying you need a carnet to take your goods over. But the actual practicalities of it – the system and the infrastructure – are not all together yet. And I think you will get more random decisions being made by border people asking for the wrong things and discriminating and asking for stuff they shouldn’t, and the same coming into the UK. Hopefully, it will smooth itself out.”

World Touring Exhibitions’ new reality was illustrated recently as the company prepared to put the aforementioned exhibition into Cologne. Canonici recalls: “All of a sudden we found out that if we were using a British company, it would have been a problem. We were told, ‘You can’t do that without a big, big cost.’ So, we used a Dutch company instead and immediately the shipper told us, ‘Oh, that’s great.’ We literally just signed one piece of paper and that was it.”

“When the pressure is coming from the other side of the Channel, that’s when things will change”

‘Make it work’
Despite this exodus of profitable business out of the UK, McPherson is of the opinion that there is little appetite on the British side for renegotiating the terms of the Trade and Cooperation Agreement, even on a bilateral basis (between the UK and individual EU member countries). “At the moment, it’s being made very clear that there is going to be no reengagement or renegotiating on the TCA,” he says. “To read into that, the message is: this is what you’ve got, and you’ve got to find a way to make it work.”

While KB Event and companies like it have already spent hundreds of thousands of euros on doing just that, McPherson remains concerned about what he sees as a fundamental lack of haulage capacity for tours in the pipeline – particularly given the number of shows that have been postponed to 2022 and beyond because of Covid-19 restrictions.

“When we get to 2022 and there are not enough trucks in the EU to be able to cover the tours, you’re going to have European promoters saying they cannot deliver their tours as they have no way of moving them because 85% of trucks for touring come out of the UK.”

Hewett emphasises the importance of also keeping the pressure on the government in the UK, warning that the entertainment haulage sector – especially those smaller British outfits that couldn’t afford to become ‘new Europeans’ – is facing wipe-out under current cabotage regulations. “We really need a concerted effort now, with the press, the music industry and everyone to come on board and push this issue because it could decimate this industry,” he says.

For Corrigan, there’s “too much at stake, economically and artistically,” for the UK and EU not to get back around the negotiating table to resolve the outstanding issues facing performers, crew and hauliers. “It’s going to happen. In the past, things have been overcome,” he says. “We used to tour Europe with carnets at every border, which was a nightmare. But today’s major touring is a much more business-like activity than it was 30 years ago, and think how much it would upset the accountants if the lighting truck didn’t make it to a gig because it got stuck at the Belgian border for 12 hours…”

In a scenario like the one mentioned, where promoters cannot deliver shows for which fans have bought tickets (and in many cases held onto them for a year or longer), “that’s when the pressure is going to change,” says McPherson, “from the UK trucking company shouting about the fact we can’t do what we do for a living anymore, to promoters in the EU shouting at their country’s government, saying, ‘You guys need to do something here. We can’t move our tours. Our revenue streams have dried up for us, and for our nation.’

“At that point, when the pressure is coming from the other side of the Channel, that’s when things will change.”

 


Read this feature in its original format in the digital edition of IQ 100:

 


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EU cabotage rules threaten post-Covid-19 touring

Major touring productions will no longer be able to draw on the expertise of British-based hauliers under the terms of the current Brexit deal, industry experts have warned.

As IQ reported on new year’s eve, the day before the deal came into effect, the days of tours of starting in the UK and continuing on to an effectively unlimited number of dates in continental Europe have come to an end – with ‘cabotage’ rules in the new EU–UK Trade and Cooperation Agreement limiting UK trucks over 3.5 tonnes to just three stops in the EU’s internal market.

“Unlimited movement by UK-based concert hauliers will cease,” confirms promoter Craig Stanley of Marshall Arts, who is the chair of the LIVE (Live music Industry Venues and Entertainment) Touring group. “The biggest impact of the cabotage regulations is that non-EU-based haulage companies will only be allowed to have a load going into the EU and then two further movements before having to turn back to their place of registration. So, as it stands, to undertake EU tours it will be necessary to have EU-registered hauliers.”

“The only way that these concert hauliers can actually continue to provide this service is by setting up European operations,” echoes Richard Burnett, CEO of the UK’s Road Haulage Association (RHA). “So that means a European business, and a European operation centre that costs a lot of money.

“Unlimited movement by UK-based concert hauliers will cease”

“Bearing in mind we’ve had the worst year, from a concert perspective, because of the Covid impact, so these hauliers haven’t got any money. They’re struggling enormously. And these are the trusted hauliers that have done this for years and years – the guys that have been around for the best part of 20, 30, 40 years. So this is a massive, massive issue.”

Under the principle of reciprocity, even if UK hauliers which can afford to do so do open an EU office, the same rules apply in the other direction – with those newly EU-registered trucks having the same issue should they be needed back in the UK, explains Stanley.

With the UK occupying a central position in the “vast majority” of international tours, restrictive cabotage regulations risk the “erosion of our position” as a leader in live music production, says Andy Lenthall, GM of the Production Services Association (PSA).

“The whole UK position as a leader in production, and place to start EU tours, has been built on freedom of movement,” he explains. “There’s no going back to the old ways – because the ‘new way’ still exists [among the EU’s remaining 27 members] – but we do need some urgency on this, and the route to a solution.”

Complicating the issue is the fact that, because most hauliers are based in the UK, the majority of drivers are British, or at least UK-based. This means, at present, there simply aren’t enough drivers on the continent to service the major concert tours alone, says Stanley.

“The whole UK position as a leader in production, and place to start EU tours, has been built on freedom of movement”

For those who can’t afford to acquire fleet of EU-registered trucks, the only other solution would be for hauliers to return to the UK after having completed their maximum number of drops, says Burnett. “Could you imagine a concert tour packing up and coming back to the UK, and then going back out? It would be ridiculous,” he adds.

In spite of the ongoing uncertainty, both Stanley and Lenthall are confident the issue can be resolved, ideally before touring restarts post-Covid-19, with the former saying the British government has been supportive +and understanding of the issues so far.

“Clarity is the key,” says Stanley. “Where we’ve enjoyed unfettered access to the EU – that will end. But what we do need to do is ensure we get some kind of cultural exemption.”

LIVE (of which the PSA is a member) and the RHA are both lobbying the British government to intervene to protect the industry by ensuring large-scale tours will be able to continue to start in the UK.

Stanley is also calling on promoters and other professionals on the continent to make their elected representatives aware of the problem in order to also push for a solution from the EU side. “The only people who can help us with this are our colleagues in the EU,” Stanley continues. “Their support is what’s needed – we need them to realise it’s a problem, as ultimately it’s going to be down to the ministers of transport in, for example, of Germany or France, to help get this sorted.”

The new cabotage rules, alongside the impact of the reintroduction of ATA Carnets, will be discussed during the panel Trucking Hell! Is it really that bad? at this year’s ILMC Production Meeting on Tuesday 2 March.

 


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Brexit: The final countdown

Aviation

Adrian Whitmarsh, Premier Aviation

There are two vitally important points.

The first is that the UK remains a member of the European Aviation Safety Agency. Although the UK government has stated they want to, currently nothing has been agreed on the mechanism and how much we will contribute.

Without this, UK aircraft and operators would be isolated and unable to continue flying – they would move wholesale to other EU states, as many are already making plans to do. UK-issued EASA pilot licences would no longer be valid outside the UK.

The second point is flight permissions. Without agreements in place, UK operators will no longer be able to fly domestically within EU states nor fly internationally from one EU state to another, as they currently have automatic rights to do. Likewise, EU operators will no longer be able to fly domestically within the UK nor, for example, would an Austrian operator be able to fly from Germany to the UK.

Time is running out to agree these complex rules and, again, the result will likely be aircraft moving off the UK register to operations set up by their owners in other EU states – eg as EasyJet has already done.

This latter point has great implications for the chartering of aircraft on European tours. Already, we are quoting flights for next summer and having to advise clients that operators may not have the necessary permissions.

“We are quoting flights for next summer and having to advise clients that operators may not have the necessary permissions”


Road freight

Richard Burnett, Road Haulage Association (RHA)

There has been so much said and written about Brexit – but much less about what it will mean to the British music industry, an industry we know and love, and one that does so much to drive the British economy.

In August, I attended a pre-Brexit meeting at the Department for Transport (DfT), with the secretary of state, Chris Grayling, and his team, to discuss the implications of a ‘no deal’. Our intention was to establish the best possible outcome for our members and the haulage industry after March 2019.

Frustratingly, we left with very little – apart from a strong indication that neither the DfT nor the rest of government understands even the most basic needs of road-freight operators. Even now, with under six months to go until the UK leaves the EU, there is not even a contingency plan – standard practice for any business, surely?

So far, all we have is the proposal of a lorry park at Dover to prevent tailbacks on the M20 – a proposal that we have already spurned as unworkable. The response of one RHA member was, “We would be sat there for days and days, costing a fortune. […] The truck park would be full in half a day.” These comments were widely picked up by broadcast, online and printed media.

We have got to have a clear government commitment, that in the event of a no deal it will seek an agreement that doesn’t impose new permits, quotas or limits on UK international operators, particularly those for whom the ability to plan far ahead is critical.

For the movers of music, time is the critical element. Forward planning is essential. But with such long lead times, how can a logistics supplier accurately plan, when any date post-29 March is such a grey area? Yes, there will be a transition period but that too remains shrouded in mystery.

Right now, all we have is words. But words alone are not enough. We need clarity, we need a workable no-deal contingency plan in place and we need it now. Without clarity, the industry that employs 2.4 million people, including the operators and employers of the 600,000 HGV drivers that keep the UK’s HGV fleet of nearly half a million trucks on the road, contributing £2.54 billion to the UK economy, will just have to hope for the best.

But for the industry responsible for moving 98% of the UK economy, hope just isn’t good enough.

“Right now, all we have is words. But words alone are not enough”


Insurance

Martin Goebbels, Integro Insurance Brokers

With regard to our specialist area of insurance for the entertainment industry, there have been no indications of change, at this stage, from the insurance markets once Brexit kicks in. Due to the specialist nature of our policies, we generally use UK insurers regardless of whether for EU or overseas policyholders.

There are certain countries, both within and outside of the EU, that have always had their own internal rulings and restrictions on how insurance can be placed and where. Sometimes this has to be placed locally or in the local language, and for these reasons we tend not to work with music industry clients in those countries – any barriers related to insurance never really came down when the UK joined the EU, so leaving it probably won’t make too much difference either!

Perhaps on other types of insurance, such as large, industrial commercial policies involving international insurers, it may have a greater effect.

“Any barriers related to insurance never really came down when the UK joined the EU, so leaving it probably won’t make too much difference either”


Visas and work permits

Tina Richard, T&S Immigration Services

At the moment, only non-EEA acts need work permission to come here for tours, one-off shows, film shoots, etc. The UK government has not yet indicated whether EEA nationals might need some form of work permission post-Brexit.

Tours currently fall into three categories of immigration complexity:

Simple: EU/EEA nationals, who don’t need permission to travel to the UK and perform there. No costs incurred; no paperwork needed. This might change after Brexit.

Medium: Non-visa nationals, from countries such as the US, Canada, Brazil and Australia. They need permission to perform in the UK but just need to present it as an entry document upon arrival. This is very cheap (as low as £21 per act).

Complex: Visa nationals, which include China, Russia, Jamaica, South Africa and more. They need permission to perform in the UK, plus a visa. These are often a nightmare and expensive (several hundred pounds per person).

It’s possible that non-British EU/EEA nationals might be pushed from category one to category two after Brexit. This will mean slightly more paperwork but it’s not too onerous. If any EU/EEA country were to be pushed into category three that would make their lives more difficult, but it seems unlikely at this point.

However, for the last two summers, queues at UK airports have been hellish. It has become almost par for the course to wait two hours or more in order to clear immigration. If they add millions of EU passengers to the lines whose paperwork and intentions have to be checked, then it’s clear they need to hire a lot more immigration officers.

“It has become almost par for the course to wait two hours or more in order to clear immigration”


Taxation and social security

Dr Dick Molenaar, All Arts Tax Advisers

There will be mixed taxation and social security consequences post-Brexit as follows.

Artist taxation: this is based on the bilateral tax treaties and not on the EU treaty. This means that taxation in the performance state and tax credit in the residence state stays the same.

But the Gerritse and Scorpio decisions of the European Court of Justice have given non-residents within the EU the right to deduct expenses and file tax returns. After Brexit, UK artists cannot use this any more and will be paying more tax than now in, for example, Germany.

US artists are better off in the EU than UK artists because the US tax treaties have a minimum threshold of $20,000 per artist per year and allow an exemption for independent production companies. EU artists performing in the UK can keep using the same FEU system because that is a UK unilateral tax measure.

VAT: there will be no reverse charge system any more but goods and services will go in and out of the EU. Administratively, this will be more complicated but will not lead to higher taxes.

Social security: No A1s possible any more for France and other states. If the UK does not create an alternative, this will lead to higher social security contributions without any rights.

The ECJ has given non-EU residents the right to deduct expenses and file tax returns. After Brexit, UK artists cannot use this”

 


Currency exchange

Simon Liddell, Centtrip Music

Big Ben may have stopped chiming but time has not stood still in Westminster. On the contrary, it is quickly slipping away: there are now under 170 days before Britain leaves the European Union, and there is still much to iron out.

While the terms of a transition period have been agreed, negotiations are ongoing on the more contentious matters of the size of the divorce bill and the future status of Northern Ireland. Meanwhile, discussions over how the UK and EU will relate in the future have not even begun.

The biggest unknown remains the true cost to Britain of leaving the EU without a trade deal in place. Once thought remote, the chances of a no-deal Brexit are increasing and that’s already weighing on the pound, which has fallen to its weakest level in a year against both the dollar and the euro. A weaker pound is not good for musicians or labels that have to pay overseas whether for touring or recording. For promoters paying US artists in dollars, the cost per show will have increased by more than 10% over the past few months. Conversely, UK artists touring the US and Europe that are paid in those currencies will benefit.

But what will happen next? A ‘hard’ Brexit is likely to push sterling to parity against the euro and a multi-decade low of £1.18 against the dollar, while a good Brexit deal for Britain would boost the pound to £1.40 against the dollar and £1.20 against the euro.

Artist, managers, agents and promoters can escape the uncertainty of currency movements, though. Fintech companies like Centtrip, which specialise in international payments, foreign exchange and treasury management services, enable you to lock in a rate today for up to two years and mitigate any adverse currency fluctuations. Whichever side of the fence you are on today, you can still have control of your money.

“A ‘hard’ Brexit is likely to push sterling to parity against the euro and a multi-decade low of £1.18 against the dollar”

 


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DEAG hoping for “reasonable solution” to post-Brexit touring

Berlin-based promoter Deutsche Entertainment AG (DEAG) is among the German businesses bracing for a ‘hard’ Brexit next March, with executive board member Detlef Kornett warning of knock-on effects on European touring if Britain leaves the EU without a deal.

IQ revealed in May that many concert tours would grind to a halt should the UK and European union fail to reach an agreement on trucking, with Richard Burnett, chief executive of the Road Haulage Association, warning there would be “17-mile tailbacks” at Calais “within 24 hours” of Britain crashing out of the trade bloc.

Speaking to the Berliner Morgenpost, Kornett says the concert giant – who does around half its business in Britain, through subsidiaries Kilimanjaro Live and Flying Music Group – is optimistic there’ll be still be strong demand for live entertainment in the event of a post-Brexit recession.

“In times of crisis people may forego a new washing machine, [for example], but there is usually still money for the small things that make you happy,” Kornett comments.

“Brexit without a concrete result from the negotiations would be bad”

However, he cautions that, with just over seven months to go until Brexit Day on 29 March 2019, the industry is still in the dark about how easy it will be for tours to travel from Britain to mainland Europe and vice versa.

“A Brexit without a concrete result from negotiations [between the UK and EU] would be bad,” he says, echoing Burnett. “But I hope that there will be a reasonable solution to the major issues.”

Other German business leaders have urged both parties to find a solution, with Christian Amsinck of the Business Associations of Berlin and Brandenburg (UVB) warning the “clock is ticking”.

Jan Eder, director of the German Chamber of Commerce and Industry (IHK), tells the paper it is “highly regrettable” that little progress in being made in Brexit negotiations are stalling. “There are fewer than 250 days left to the end of March 2019 and we are still facing a completely open negotiation result. That leaves many questions for [German] companies that are economically linked to the UK.”

 


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