Brussels denies reports on Brexit financial services agreement

Brussels denies reports on Brexit financial services agreement
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EU Chief Negotiator for Brexit Michel Barnier denied on Thursday that an agreement had been concluded between the European Union (EU) and the UK on financial services after Brexit. “Misleading press articles today on Brexit and financial services,” Barnier commented in a message on Twitter in reaction to an announcement in the Times on the conclusion of a financial-services agreement aimed at maintaining British access to the European market after Britain’s withdrawal from the EU.

“Reminder: EU may grant and withdraw equivalence in some financial services autonomously,” the EU Chief Negotiator tweeted. “As with other third countries, EU [is] ready to have close regulatory dialogue with UK in full respect for autonomy of both parties.”

The Times had reported on Thursday that “British and European negotiators have reached a tentative agreement on all aspects of a future partnership on services, as well as the exchange of data.” It quoted government sources as saying that the EU would guarantee British companies access to European markets as long as British financial regulations remained largely in line with those of Europe.

For its part, Britain’s Brexit Ministry limited itself to saying: “Nothing is agreed until everything is agreed.”.

The British pound had soared just after midnight GMT following the publication of the Times article and by 08.00 a.m. on Thursday, it traded 1,29 to the dollar, its highest rate in six sessions and a gain of 1.7% over two days.

London wants an agreement that would allow British financial services firms to keep operating in Europe after Brexit on 29 March 2019, in particular to protect the financial position of the City. The EU proposes a mechanism of equivalences to enable the British financial sector to keep having access to the continent.

In early October, the Bank of England had expressed concern about the slow progress of negotiations and recalled that European companies had passed 69,000 billion pounds in financial commitments through British compensation funds, which would have to be transferred to European funds or interrupted by the end of March 2019 if there was no agreement by then.

For his part, UK Brexit Minister Dominic Raab said in a letter to British parliamentarians published on Wednesday that he felt an agreement on the UK withdrawal from the EU could be sealed by 21 November, and that 95% of the withdrawal agreement had been settled.

A major sticking point in the Brexit negotiations continues to be the issue of preventing the return of a hard border between Northern Ireland, which is part of the UK, and the Republic of Ireland, an EU member.

The Brussels Times

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