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At a meeting on Monday in Brussels that kicked off a week of talks among the EU’s 27 other states, diplomats approved French requests to ring-fence financial services from a future trade agreement, and strengthened the language in draft negotiating guidelines on European residents in Britain and the amount the U.K. owes the bloc.
In the latest draft, financial services were split off from wording on the trade deal, with diplomats inserting a new paragraph stating that “any future framework should safeguard financial stability in the Union and respect its regulatory and supervisory standards regime and application,” according to the document obtained by Bloomberg News.
That language was designed to reflect a demand from France, a day after the first round of its presidential election, that the bloc mustn’t accept financial services being part of any future trade agreement unless Britain is willing to accept the EU’s rules, according to an EU official.
The new wording delivers a blow to U.K. Prime Minister Theresa May’s ambition for a sweeping trade deal with the bloc that would encompass financial services yet free Britain of the oversight of EU laws. It will also disappoint those in the U.K. who speculated victory in June’s snap election would make it easier for May to secure a better Brexit deal for Britain.
Permanent Residence
Reciprocal guarantees to protect the rights of EU citizens in the U.K. and British citizens in the EU at the time Britain leaves the bloc should include “the right to acquire permanent residence after a continuous period of five years,” according to the draft. [...]