Brexit – EU’s chief negotiator wants a “special” agreement with the financial sector
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Brexit – EU’s chief negotiator wants a “special” agreement with the financial sector

EU’s chief negotiator for Brexit, Frenchman Michel Barnier, told European MEPs they need a “special” agreement with the British financial sector. This is so that UK credit will continue flowing to the continent, The Guardian said on Friday.

Mr Barnier told members of the European parliament that he wants to make sure banks, businesses and governments in the 27 other EU member states will still have access to the City (the London business quarter) after the United Kingdom leaves the EU. This was all written in a non-published summary of the meeting that The Guardian got to look at.

A European Commission spokesman told the Guardian that the summary did not “correctly reflect what Mr Barnier said”.  He has taken a hard line with regards to Brexit so far.

European officials consider the London financial sector a potential British weakness during the negotiations. The British will want to defend the jewel in their economy and maintain cross border trade with the continent.

“We will need to do very precise work in this area”, Mr Barnier said, according to the summary. “There will be a special/unique relationship. We will need to work outside the negotiations to avoid financial instability”.

On Tuesday, the Bank of England boss, Mark Carney, said that Europe would have a lot to lose if no agreement was reached. Mr Barnier appears to agree, according to The Guardian.

Mr Carney also told British MPs that there was “more risk of short-term financial instability for the continent than for the United Kingdom during the transition”.

He added that three quarters of continental trade, half of continental loans and half of European Stock transactions happened in London. He also said that isolating Europe from London could make the capital more expensive and have serious consequences for European banks, businesses and governments.

Mr Barnier said the EU would not let the United Kingdom draw up a Brexit “à la carte” during the divorce procedure with the EU.

On Saturday, an influential group of British MPs, the “Brexit Committee” (an interparty organisation) called for Prime Minister Theresa May to tell them her plan for leaving the EU before mid-February. They want her to prepare a transition agreement to reduce uncertainty for businesses.

“We are not asking for the government to forget about their no-go areas or withdrawal solutions during the negotiations, but we want more clarity regarding their global objectives and the length and complexity of the negotiation process”, said Committee President Hilary Benn.

“The government has to find adequate transitional arrangements to help businesses” for both the EU and UK’s sake, he said.

The Brexit Committee thinks the government has to try and maintain the European market’s access to British financing, and both parties would benefit from that. The Committee also issued a warning against returning to Customs checks in other economic sectors.

Finally, he called for the government to commit to putting the final Brexit agreement to a vote in the British parliament. The majority of British MPs had campaigned for the UK to remain in the EU during last June’s referendum.

(Source: Belga)