Yahoo Finance EU refutes ‘misleading’ reports of Brexit deal over financial services
Senior EU figures have shot down reports of a Brexit deal over financial services which sparked a rally in the pound.
The Times reported a Whitehall source as saying they were close to reaching an agreement on the future relationship of services and the data exchange.
The news, which gave the City hope their access to EU markets would be safeguarded after Brexit, saw the pound jump half a percent against the euro (GBPEUR=X).
But politicians at every level of the EU have now refuted the report that the UK had been guaranteed access on the basis that it kept the same regulations.
A European Commission spokesperson called the reports “unsubstantiated” and EU chief negotiator Michel Barnier said they were “misleading.”
Misleading press articles today on #Brexit & financial services. Reminder: EU may grant and withdraw equivalence in some financial services autonomously. As with other 3rd countries, EU ready to have close regulatory dialogue with UK in full respect for autonomy of both parties.
— Michel Barnier (@MichelBarnier) November 1, 2018
In what appeared to be a coordinated strike on the story, European financial services commissioner Valdis Dombrovskis also rubbished claims a deal was done.
Fully agree with @MichelBarnier. #EU ready to have close regulatory dialogue with #UK in full respect for autonomy of both parties. Equivalence remains fully autonomous https://t.co/dNgX1PCKNx
— Valdis Dombrovskis (@VDombrovskis) November 1, 2018
The UK is pushing for a “mutual recognition” system in which the UK and EU would accept each other’s financial regulations, rather than the UK simply having to accept EU rules.
But the EU says the UK will have to make do with its ‘equivalence’ system, which sees the bloc grant market access to foreign finance firms from countries with similar standards.
More than 30 non-EU countries, including the US and Canada, operate on this basis.
Speaking in April, Barnier said: “Why would the equivalence system, which works well for the US industry, not work for the City?”
And European parliament Brexit steering group member Danuta Huebner confirmed on Thursday it would be “difficult to imagine” the EU offering any more than ‘equivalence’.
Difficult to imagine more than FTA plus equivalence plus memoranda of understanding between authorities. But why should it be disappointing ? https://t.co/sX7YL14EIM
— Danuta Huebner (@danutahuebner) November 1, 2018
Detailed negotiations about the future relationship won’t even begin until the Withdrawal Agreement is concluded.
Brexit secretary Dominic Raab said in a letter to Commons Brexit committee chairman Hilary Benn that he wants to settle the divorce agreement by 21 November.
Irish foreign minister Simon Coveney said on Wednesday that would only be possible if there was agreement within the next week on an Irish border backstop.
“If there is no follow through on those commitments, then it is hard to see how this gets done in November,” he said.
Minutes of the European parliament’s conference of presidents reveal that a deal was on the table ahead of the last European Council but that it was vetoed by Raab in an eve of summit meeting with Michel Barnier in Brussels
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