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26 April 2018

Financial Times: Michel Barnier quashes UK hopes of special access to EU markets

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Michel Barnier told a financial industry conference in Sofia that claims by Bank of England governor Mark Carney and other UK officials that “the EU desperately needs the City of London” were false.

He said the idea that the EU would be worse off if Britain’s financial sector did not have full market access was “not what we hear from market participants, and it is not the analysis that we have made ourselves”.

Mr Barnier also made clear that the EU would never accept British prime minister Theresa May’s plan for a special access regime based around a broad commitment to adopt financial rules that have the same effect as those in the EU.

The former French foreign minister said the UK was “pleading for a system” that was impossible given that Britain would no longer be within the EU’s single market, and so would not be covered by its regulations and oversight. [...]

“The EU understands that the UK does not want to become a ‘rule-taker’,” Mr Barnier said. “But the UK also needs to understand that the EU cannot accept mutual market access without the common safeguards that underpin it.”

The UK government refused to comment, but senior officials noted that in 2011, when Mr Barnier was the EU internal market commissioner, he struck a different note in a speech in London when he said he saw the City as an “asset to the European financial sector”.

Mr Barnier said any granting of equivalence would be linked to the UK’s willingness to stick closely to EU standards, saying that the financial crisis had shown the need for tough regulations, including of bankers’ bonuses.

Before the crisis “remuneration of bankers set the wrong incentives and allowed excessive risk-taking”, he said.

Full article on Financial Times (subscription required)

Speech by Michel Barnier at the Eurofi High-level Seminar 2018

© Financial Times

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