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Barnier told a private meeting of MEPs this week that special work was needed to avoid financial instability, according to a European parliament summary of the session. “Some very specific work has to be done in this area,” he said, according to the minutes. “There will be a special/specific relationship. There will need to be work outside of the negotiation box … in order to avoid financial instability.”
Barnier later moved to clarify his comments, claiming on Twitter that he referred to a “special vigilance” required to ensure the EU remained financially stable after Brexit.
The remarks hint at concern among senior Brussels policymakers about the damaging consequences of Brexit for the continent if Europe’s biggest financial centre is cut adrift.
A spokesman for the European commission insisted that the minutes, which were drawn up by European parliament officials, did not “correctly reflect what Mr Barnier said”. A source present at the meeting, however, described the minutes as “more or less accurate”. Barnier discussed the problems of financial services, the source said, although the negotiator’s preferred options were not clear.
The suggestion recorded in the minutes does mirror the view of the governor of the Bank of England, Mark Carney. He told MPs on Tuesday “there are greater financial stability risks on the continent in the short term, for the transition, than there are for the UK”.
Carney said other EU nations relied heavily on the City for their financial needs and could face serious problems if international banks based in London were no longer able to gain easy access to European countries and corporations. “If you rely on a jurisdiction [the UK] for three-quarters of your hedging activities, three-quarters of your foreign exchange activity, half your lending and half your securities transactions, you should think very carefully about the transition from where you are today to where the new equilibrium will be,” he said. [...]