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22 July 2018

Financial Times: Brussels rejects UK’s financial services Brexit plan

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Brussels has rejected the UK’s proposals on how to govern the City of London’s access to the European market after Brexit, saying Theresa May’s latest financial services plan would rob the EU of its “decision making autonomy”.

Michel Barnier, the EU’s chief Brexit negotiator, told European affairs ministers on Friday that the British prime minister’s vision for the City’s relationship with the EU would violate the principle that access rights to the bloc’s financial services market are a gift from Brussels that can be freely withdrawn.

His remarks were a rebuff to the UK government, which published its white paper this month on Britain’s future relations with the EU, and highlight the many conflicts between the two sides despite a more conciliatory tone over the Northern Ireland border issue at the same meeting. 

The 98-page document signalled a shift in its position on financial services with plans for an enhanced “equivalence” model — building on an existing EU system that countries including the US and Singapore use to simplify their access to the bloc.

The UK has acknowledged that it would lose its single market “passport”, and Philip Hammond, chancellor, scrapped a more ambitious “mutual recognition” plan, but said the City would seek a better deal than the EU’s existing equivalence model.

However, according to two people who attended Friday’s meeting, Mr Barnier told ministers that the plan would ride roughshod over the EU’s stance that equivalence decisions must be made unilaterally by Brussels. He said it would amount to a “system of generalised equivalence that would in reality be jointly run by the EU and UK”.  [...]

Full article on Financial Times (subscription required)

© Financial Times

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