An influential EU politician has joined others in apparently calling for London to be stripped of its euro-clearing crown after Brexit.
Manfred Weber, the leader of the European People's Party in the European Parliament, today said it was not “thinkable” that the UK could continue to handle euro-denominated business when it leaves the EU. He declined to say whether he was referring specifically to clearing.
“EU citizens decide on their own money,” said Weber, who is an ally of German Chancellor Angela Merkel, while laying out his priorities for Brexit negotiations at a European Parliament press conference today.
“What do we mean with this? That’s about the financial markets. When Great Britain is leaving the European Union, for us it’s not thinkable that at the end the whole euro business is still managed in London. When this is an external place, this is not an EU place any more, then the euro business should be managed on EU soil.”
Euro-denominated clearing, the process through which financial transactions are settled, is currently dominated by London, which handles an estimated 70 per cent of the market.
It has emerged as a major EU battleground since the UK voted for Brexit. Within days of the EU referendum, French President Francois Hollande said London could no longer be allowed to retain its euro clearing power.
The European Central Bank (ECB) has previously tried to prise euro clearing from London, but was denied by the EU General Court in 2015.
The UK government does not appear overly concerned, responding to a House of Lords committee report published last month by stating: “It is not clear that the rules of the Single Market even after Britain has left would permit the ECB to require euro-denominated instruments to be cleared inside the Eurozone.”