EU plots to punish City of London for Brexit as Brussels spooked by Sunak’s ‘Big Bang 2.0′
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Top eurocrat Mairead McGuinness suggested the EU would restrict the City of London’s access to European firms to force through a post-Brexit exodus of workers and capital to the Continent. The financial services commissioner is responsible for bolstering euro-based markets while also limiting their reliance on Britain. As UK and EU officials draw up plans for future financial services cooperation, Ms McGuinness insisted there must be “change” in their relationship.
She told Bloomberg Television this morning: “Change is coming.”
Ms McGuinness added: “It’s very clear London is a major financial centre, that will not change overnight.
“But it’s also important to acknowledge that its significance was part and parcel of being in the European Union.
“These are realities because of Brexit but I do hope when the memorandum is agreed between us that we will then move to the detail on specifics and I hope we can make progress and cooperate.
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“However, and it’s important to say this, there is no recreating the single market for financial services for the United Kingdom when they have decided to leave the single market.”
Brussels officials have been spooked by Chancellor Rishi Sunak’s plans for the creation of a “Big Bang 2.0” for the City of London.
His strategy, which aims to boost business by cutting red tape, is said to be reminiscent of Margaret Thatcher’s deregulation of the financial markets.
Ms McGuinness expressed concern that Britain could drastically move away from the EU’s rulebook to secure a competitive advantage.
But the eurocrat insisted this doesn’t mean the bloc’s new relationship with the bloc has to be marred in controversy.
She said: “The future hinges on us understanding fully how our partners, the United Kingdom, expect to continue now that Brexit is an absolute reality.
“We have heard words like ‘deregulation’, we know know Brexit was about moving away from what European has done across all sectors, and possibly including the financial sector.
“We are ready to sit down and engage and I think it’s really important that we get the first step right. In a way, what we will be doing with the United Kingdom with this memorandum is similar to our relationship with the United States.”
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The EU and US have established a “Joint Financial Regulatory Forum” to enhance their cooperation in the sector.
British and Brussels officials are expected to agree a framework for future financial services coordination by the end of March.
But Ms McGuinness insisted that the EU will only sign an agreement to ensure “our financial system is fir for purpose for the future”.
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She added: “We clearly want and desire a relationship with the United Kingdom, we have it already in the last moments of last year, we agreed a cooperation and trade agreement – that’s really positive – but even there are difficulties there because the reality of being a third country has come home to roost.
“On financial services, we’re not moving. We will move in a way which strengthens our regulation. The global economy on finance is a reality, we need to make sure that the regulation of it is fit for purpose.
“You know we do recall the past and light touch regulation in financial services and it did no one any favours.”
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