Selasa, 30 Juni 2020

Barnier rejects UK bid to preserve City of London’s rights via trade deal - Financial Times

The EU’s chief Brexit negotiator has rejected British proposals to smooth the City of London’s access to European customers, warning that both sides should prepare for “big changes” from the start of next year. 

Speaking to a gathering of lobbyists for the financial industry, Michel Barnier said Britain had made “unacceptable” proposals to retain EU freedom of movement rights for its financial services professionals and to restrict Brussels' regulatory room for manoeuvre. 

“It wants to ban residence requirements for senior managers and boards of directors, to ensure that all essential functions remain in London,” Mr Barnier said in a video address. “It wants almost free rein for service suppliers to fly in and out for short-term stays.”

Warning that “the UK cannot keep the benefits of the single market without the obligations”, Mr Barnier said “there is no way” the proposals would be accepted by EU national governments or the European Parliament. 

“We must look beyond short-term adaptation and fragmentation costs, to our long-term interests,” he said, urging companies to prepare for the end of Britain’s post-Brexit transition period on December 31, when the country will leave the European single market and customs union.

Mr Barnier's comments are a reflection of how tensions over the City’s future role have infected talks between the two sides on the future relationship despite the issue being formally outside the scope of the negotiations. 

Future market-access rights for British financial firms will be determined unilaterally by Brussels, using a process known as “equivalence” that involves deciding whether UK regulation is as tough as that in the EU. Under the system, access is entirely in the EU’s gift and can be withdrawn at short notice if circumstances change. 

The EU and the UK agreed last year to try to complete parallel equivalence assessments of each other’s rules by June 30, but have missed the deadline with both sides blaming the other.

Mr Barnier said the focus on equivalence had not stopped Britain trying separately to secure some rights through the two sides’ negotiations on trade in services.

Brussels’ specific complaints, he said, included that Britain was trying “to limit the scope” of a standard provision in trade deals that allows both sides to adopt whatever trade restrictions they deem necessary to protect financial stability.

He said Britain was also trying to tamper with the unilateral nature of equivalence decisions, by “attempting to frame the EU’s process” for withdrawing access rights and “turn our unilateral decisions into co-managed ones”.

Business groups in both the EU and UK have called for as much clarity as possible about the new arrangements, warning that disruption and uncertainty will drive up costs, but Mr Barnier warned that this goal was undermined by Britain's determination to break away from EU rules. 

The EU's equivalence assessments “have to be forward-looking, given the UK’s publicly stated intention to diverge from EU rules after January 1”, he said. “We will only grant equivalences in those areas where it is clearly in the interest of the EU: of our financial stability, our investors and our consumers.”

He also said that, unlike single market membership, equivalence was not a comprehensive system, and that core sectors such as insurance, commercial bank lending and deposit-taking would not be covered. 

For such activities, UK-based firms would either have to set up regulated offices in the EU, or apply for permission from national authorities to market their services. 

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2020-06-30 17:41:58Z
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