New: EU-UK spat over missed deadline for City of London’s potential access to European markets, as Michel Barnier accuses the government of cherrypicking.
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Recap: Both sides had agreed to “best endeavours” to finalise assessments on equivalence for financial services by the end of June. Equivalence is separate to EU-UK talks.
The EU has always said it will decide whether to grant UK financial firms “equivalence” i.e, access to EU markets, as long as UK regulation is robust enough. Equivalence can be withdrawn at 30 days notice.
The EU says it has sent questionnaires to the UK covering 28 areas, but UK has only returned four documents. UK accuse Brussels of being late - e.g. sending 248 pages on 25 May and asking far broader questions. EU only responded last night to requests for clarification.
From British pov, it’s a bit rich for EU to say it is surprised not to get docs, given how long it took Brussels officials to draft them. While EU has been saying for weeks that HMT is overwhelmed by coronavirus furlough scheme and slow to respond.
Behind deadline spat, there is the divide that has been in plain sight for the best part of four years.
The UK say: ‘trust us, we already have similar financial services regulation’. The EU reply: ‘but you said the whole point of Brexit was divergence, we can’t trust anyone’.
The UK say: ‘trust us, we already have similar financial services regulation’. The EU reply: ‘but you said the whole point of Brexit was divergence, we can’t trust anyone’.
The UK has been pushing for permanent equivalence, but the EU has always said no.
The UK wants an FTA based on precedent, in a twist, the EU says its offer - a chapter on financial services to ensure non-discrimination - is in line with other FTAs.
The UK wants an FTA based on precedent, in a twist, the EU says its offer - a chapter on financial services to ensure non-discrimination - is in line with other FTAs.
Michel Barnier has said the UK wants to go much further than ordinary FTA fin services chapter, saying gov wants to keep single market benefits. (He doesn’t use the word “cherrypicking” but that is the gist).
HMT spokesperson: "Both sides committed to completing equivalence assessments ahead of the summer. As the UK and EU start from a position of having similar financial services regulation this should be a straightforward process."
Adds UK has done its own assessments on time.
Adds UK has done its own assessments on time.
