LONDON: Philip Hammond has said European leaders are “backward-looking” and preoccupied with “paranoia” about other countries leaving the bloc after Brexit.

The chancellor said EU must let go of ideas of punishing Britain for voting to leave the bloc and stop “constantly threatening members” who want to walk away.

His comments came during a three-day trip to Germany aimed at drumming up trade deals after Brexit, where Hammond told EU leaders that they should be clear on the future relationship they want with the UK  — as “it takes two to tango.”

He also made a joint pitch to business leaders with Brexit Secretary David Davis, where they called for a bespoke post-Brexit trade deal with the EU which would be the “most ambitious in the world.”

In an interview with the German newspaper Welt am Sonntag, Hammond said: “We hear a willingness and enthusiasm in the USA and from many other countries around the world to make new trade deals with us. But we don’t hear that from Europe.

“We hear from Europe only backward-looking stuff. ‘Are you sure you want to leave?’ Or ‘It’s a bad decision to leave.’ Or ‘You must be punished for deciding to leave.’

“Well, we are leaving and we want to retain the closest possible partnership with the European Union. But we can only have that if the European Union also wants it.” Asked if a soft Brexit would encourage other countries to leave, the chancellor said: “I can understand that paranoia. But imagine you are running a successful, thriving club.

“If one member leaves, you don’t immediately panic that all the other members might leave, but are confident they will want to remain.

“You cannot really run a club if you are constantly threatening members who decide to leave. You should rather redouble your efforts to remain attractive for new and existing members.”

Hammond also stood firm on demands that financial services were included in any Brexit deal — an idea that has been opposed by chief Brexit negotiator Michel Barnier.

The chancellor said it was not a “realistic proposition” for the UK to accept a post-Brexit trade deal that does not include services and that the EU would be “crazy” to cut itself off from the City.

Earlier, Britain and Spain said they have held their first informal Brexit-related talks this week in Madrid touching on how Britain’s future departure from the European Union could apply to Gibraltar.

The EU’s guidelines on negotiations for Britain’s future relationship with the bloc granted Spain veto rights over the issue of Gibraltar, the tiny outcrop at the tip of the Iberian Peninsula that London has controlled for three centuries against Madrid’s wishes. The Spanish Ministry of Foreign Affairs said on Friday that high-ranking officials from the ministry received a British delegation on Thursday. It did not elaborate.

The British Foreign Office said the “informal meeting” was “productive” and that Gibraltar authorities had been involved in setting it up and were briefed on it. It added Britain is committed to defending Gibraltar’s priorities.

Meanwhile, it is reported that the Netherlands and Spain have not reached an agreement about how Britain should leave the European Union, a Dutch Finance Ministry official said on Friday, denying an earlier report of a deal that drove sterling sharply higher.

Bloomberg reported that the Spanish and Dutch finance ministers had agreed to work together for a softer Brexit agreement that maintains close ties between the EU and Britain.