Barnier to United Kingdom: don't 'kid yourself' on financial services

Marco Green
February 14, 2020

European Commission President Ursula von der Leyen said she was encouraged by British Prime Minister Boris Johnson's ambition on social and environmental standards and that these could form the basis of "level playing field" obligations between the EU and Britain.

Von der Leyen said she was surprised Johnson even raised the possibility that Britain would accept Australia-style trade arrangements, including quotas and tariffs, if his government can't reach a comprehensive agreement with the EU.

"We may choose to do things in the same way as the European Union if it works for the UK".

The document Mr Javid held suggested potential "landing zones" could include selective equivalence, joint declarations on co-operation, and "extensive" memorandums of understanding - at the cost of not including a chapter on financial services in the post-Brexit free trade agreement.

British financial firms have already opened offices in the European Union in order to avoid losing access to the single market.

"Australia, without any doubt, is a strong and a like-minded partner".

Industry leaders told Business Insider this week that the prospective shape of Johnson's "Australia-style" trade deal risked severe damage to firms across the country which rely on cross-border trade and supply chains.

It was left to Michel Barnier to deliver the home truths: the UK's desire to end the transition period this year has left too little time for the negotiations, there will be serious economic consequences if there's no trade deal at the end of them, and British financial services firms won't enjoy special treatment.

Ms von der Leyen's speech in Strasbourg came as the UK Government set out further details of its plans for January 1 2021 after the Brexit transition period expires.

Writing earlier in the London newspaper City AM, Mr Javid insisted Britain will diverge from the bloc's regulations.

The Financial Conduct Authority boss told the House of Lords EU committee that he hoped future regulation would spur innovation and a more global outlook.

EU Brexit negotiator Michel Barnier on Tuesday rejected the United Kingdom government's call for permanent access to financial services in the EU. "We will keep control of these tools, and we will retain the free hand to take our own decisions".

Britain left the European Union on January 31 after almost half a century of membership - and the post-Brexit transition period ends on December 31. The UK's Chancellor reacted to the British Retail Consortium's (BRC) warning that border checks on imports could cause fresh food supply problems.

A report by audit firm Ernst & Young in 2019 denotes that financial service companies moved one trillion pounds (about 1.3 trillion US dollars) in assets to the rest of Europe due to the Brexit, and some 7,000 financial services jobs stood to be transferred from London to Europe, "with around 2,000 new jobs set to be hired in European financial hubs over the United Kingdom capital".

Other reports by Click Lancashire

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