German officials predict Mr Davis, 68, will agree to the EU’s terms and conditions with Brexit talks appearing to stall before moving on to the future relationship between the UK and EU as well as a trade deal.
The Conservative minister is due to give a keynote speech to Germany’s largest trade body the Federation of German Industries (BDI) later today.
The body’s former head, Hans-Olaf Henkel said both the German government and businesses wanted to see major concessions from Mr Davis on the so-called Brexit bill and transitional arrangements and said he expected the UK to offer “unconditional surrender”.
Mr Henkel told the Telegraph: “I think what the German government wants is identical to what Michel Barnier and Guy Verhofstadt want.
“The BDI has consistently followed the line of the German government on this… if I were to use a military term, what they want is unconditional surrender.”
His comments come after Mr Barnier, the EU’s chief negotiator, demanded Britain gives more clarity on the Brexit bill before EU leaders agreed to start talks on the future relationship between the UK and the EU.
The current BDI Director General Joachim Long has called on Theresa May to agree to a transition period of more than two years as this was not enough time to set up the necessary legal framework.
Mr Henkel, now an MEP and the Vice-Chair of the European Conservatives and Reforms Group, also criticised the EU for its phased approach to the Brexit talks.
He said the decision to address citizens rights, Northern Ireland and the financial settlement was not logical and attacked Mr Barnier for not consulting Britain on the approach beforehand.
He said: ”The entire road map for the Brexit negotiations has demanded that Britain can agree on three issues before they start negotiations on trade and customs, which is not logical.
“I was there when Barnier and Verhofstadt presented the road map to a group of MEPs in Brussels. I asked Barnier, did you involve Britain in this road map? And he said no.”
He added: “Most of the businesses, I would say 95 per cent of them, regret Brexit because they are starting to realise it does not only pose significant problems to Britain but also to Germany and the European Union.”