The chief Brexit negotiator for the EU, Michel Barnier, struck a blow to the British government when he declared that the City of London will not get a special deal for its lucrative financial services sector. Monsieur Barnier made clear that since the UK government has insisted that it will leave the EU single market, then British banks and financial firms would lose their financial passporting rights.
Speaking to reporters this week, the chief negotiator claimed that as a consequence of the red lines that Downing Street had set itself, ‘’there is not a single trade agreement that is open to financial services. It doesn’t exist’’. He added that ‘’in leaving the single market, they lose the financial services passport’’.
For the UK’s Brexit negotiator, David Davis, the statement by Monsieur Barnier will crush any hope of a bespoke trade deal that would include the financial services sector. Mr. Davis had called for a ‘’Canada plus plus plus’’ deal that would be styled upon the EU-Canada free trade agreement but include terms on the services sector. The Bank of England Governor Mark Carney rebuked Monsieur Barnier’s comments, saying ‘’I don’t accept the argument that just because it has not been done in the past, it can’t be done in the future’’.
In addition to his comments about the financial services sector, it was revealed that Michel Barnier circulated the slide below to EU leaders at last week’s European Summit, highlighting how the UK’s red lines left a Free Trade Agreement as the only possible option.
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