Michel Barnier, Europe’s top Brexit negotiator, has dismissed the UK’s bid to preserve the rights of London’s financial district after it leaves the Europe Union.
In a video address on 30 June, Barnier said the UK was seeking to “go much further” than simply avoiding discrimination for its firms, and its proposals would “severely limit” the autonomy of EU regulators and decision-makers. “I will be blunt: its proposals are unacceptable,” said Barnier.
He pointed to the UK’s attempts to create a “legally enforceable regulatory cooperation framework” and to turn the EU’s unilateral decisions into “co-managed ones”.
“There is no way member states or the European Parliament would accept this!” said Barnier.
The news is a blow to those who hoped to maintain harmony in financial services regulation for firms operating in both jurisdictions.
Britain is currently in a transition period that will last until 31 December. The two sides were due to decide by the end of June whether to extend that deadline to allow more time for negotiations, but UK Prime Minister Boris Johnson has repeatedly said he would rather walk away with no deal than prolong talks.
In early June, the Bank of England warned banks to brace themselves for that outcome.
Barnier accused the UK of trying “to keep as many single market benefits as it can”, such as the ability for City professionals to fly in and out of Europe for short-term stays, despite choosing to no longer be a member state. The UK is also trying to sidestep the EU’s residence requirements for senior managers and boards of directors, to keep critical functions of businesses operating in Europe in London, he said.
He said that the UK “chose to leave the EU Single Market and stop applying our common ecosystem of rules, supervision and enforcement mechanisms”.
“I know that many hope our equivalence decisions will provide continuity. Many believe that ‘responsible politicians’ on both side of the Channel should make this happen,” he continued.
“But things have to change. The UK and the EU will be two separate markets, two jurisdictions. And the EU must ensure that important risks to our financial stability are managed within the framework of our Single Market ecosystem of legislation, supervision and jurisdiction.”
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