Remember special relationships? The EU's chief Brexit negotiator wants one with the City of London

 
Oliver Gill
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Ecofin Informal Meeting In Dublin
Michel Barnier (left) believes work needs to be done to maintain ties with the City of London (Source: Getty)

The EU's chief Brexit negotiator has indicated signs of a softening his previously hardline stance of the UK's exit from the union, letting slip a desire to allow member states access to the City.

Michel Barnier wants a "special" relationship with London financial powerhouse as part of any Brexit deal, according to unpublished European parliament minutes, according to the Guardian newspaper.

Read more: Theresa May is to give a much-anticipated Brexit speech next week

“Some very specific work has to be done in this area,” Barnier said.

There will be a special/specific relationship. There will need to be work outside of the negotiation box … in order to avoid financial instability.

There was, however, some confusion as to the comments made in the minutes.

A spokesperson for the European commission said the minutes did not “correctly reflect what Mr Barnier said”.

However, a source at meeting told the Guardian, the minutes were "more or less accurate".

Carney predictions

The news that the EU member states are aware of the risk of cutting links to the City of London echoes comments made by the governor of the Bank of England on Wednesday.

Read more: Brexit minister confirms bumpy EU departure will hurt Europe

When questioned by MPs on whether an unclear Brexit with no transition period would put businesses at riskCarney said "the consequence [of this] would be greater for Europe than the UK".

Carney's responses gave "strong advice" according to the treasury select committee chair Andrew Tyrie. He said:

He's told the UK’s negotiating counterparts in the EU that they, more than the UK, are vulnerable to financial stability risks during the period of transition. I hope they are all listening.

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