Wednesday, February 12, 2020
UK told it can't have its cake, and eat it
Those on the Brexit side who have been confidently predicting that the negotiations with the EU will be over by Christmas, and that we will get all we want, may well want to rethink their strategy this morning.
The Independent reports on a setback for this mindset with the EU's chief negotiator immediately rejecting a plea by Sajid Javid to protect the City's access to EU financial markets after Brexit.
The paper says that the Chancellor had called for a “reliable equivalence process” for financial services rules on which “a durable relationship” can be built with the EU, but just hours after the proposal was published Brussels' chief negotiator Michel Barnier told him he needed to think again:
"I would like to take this opportunity to make it clear to certain people in the United Kingdom bearing authority that they should not kid themselves about this - there will not be general, open-ended, ongoing equivalence in financial services," he said.
Mr Barnier added that the EU would "retain a free hand to take our own decisions" and would simply not negotiate with the UK on this point.
As the Independent points out this is no academic point:
The question at stake is whether EU authorities would call the shots on whether UK firms were complying with EU regulations to trade on the continent.
If that were the case, the UK would be a less attractive location to base a financial institution in because it could be frozen out of EU markets at the whim of European regulators.
Under a more "durable" agreement as suggested by Mr Javid, market access would be backed at treaty level and it would be harder to freeze out UK firms. If this were the case, banks and other financial institutions could base themselves in the UK knowing they might not be frozen out by EU regulators one day to the next.
As a result of Britain's departure from the EU, City firms will lose their automatic "passporting" rights to keep doing business on the continent.
The UK's financial sector is a major contributor towards our balance of payments. Once more we are facing a major economic catastrophe because of the ideological intransigence of our government.
The Independent reports on a setback for this mindset with the EU's chief negotiator immediately rejecting a plea by Sajid Javid to protect the City's access to EU financial markets after Brexit.
The paper says that the Chancellor had called for a “reliable equivalence process” for financial services rules on which “a durable relationship” can be built with the EU, but just hours after the proposal was published Brussels' chief negotiator Michel Barnier told him he needed to think again:
"I would like to take this opportunity to make it clear to certain people in the United Kingdom bearing authority that they should not kid themselves about this - there will not be general, open-ended, ongoing equivalence in financial services," he said.
Mr Barnier added that the EU would "retain a free hand to take our own decisions" and would simply not negotiate with the UK on this point.
As the Independent points out this is no academic point:
The question at stake is whether EU authorities would call the shots on whether UK firms were complying with EU regulations to trade on the continent.
If that were the case, the UK would be a less attractive location to base a financial institution in because it could be frozen out of EU markets at the whim of European regulators.
Under a more "durable" agreement as suggested by Mr Javid, market access would be backed at treaty level and it would be harder to freeze out UK firms. If this were the case, banks and other financial institutions could base themselves in the UK knowing they might not be frozen out by EU regulators one day to the next.
As a result of Britain's departure from the EU, City firms will lose their automatic "passporting" rights to keep doing business on the continent.
The UK's financial sector is a major contributor towards our balance of payments. Once more we are facing a major economic catastrophe because of the ideological intransigence of our government.
