Barnier: Future financial services trade must "respect EU regulatory autonomy"

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Barnier visited Downing Street two days ago (Source: Getty)

The EU's chief Brexit negotiator Michel Barnier has warned that any future trade in financial services "must respect EU regulatory autonomy". 

The French politician today met with European Central Bank representatives including President Mario Draghi and vice President Vitor Constancio​, alongside his European Commission colleague Valdis Dombrovkis, who is in charge of financial stability and financial services.

The group discussed the impact Brexit would have on the sector, with Barnier tweeting subsequently: "EU financial services market is built on a single rulebook and integrated supervision. Future EU-UK relationship must respect EU regulatory autonomy." 

The City has been pushing for a blueprint for trade based on mutual regulatory alignment, deferring to a joint dispute resolution body when needed. However in recent weeks managed divergence has appeared to be gaining weight as an option

Policy chairman at the City of London Corporation, Catherine McGuinness, told City A.M.: "Of course once the UK leaves the EU each will have an autonomous regulatory decision-making process.

“But our financial markets will remain deeply integrated, and we will share the same commitment to high regulatory standards.

“That’s why the International Regulatory Strategy Group proposes that both sides work on the basis of mutual recognition of each other’s regulations. So long as both the UK and the EU are delivering the same regulatory outcomes, there is no reason to erect damaging trade barriers.

“As future trade negotiations get underway, we look forward to working with our peers across the EU27 on how the IRSG’s proposals can benefit the entire continent.”

Barnier's ECB meeting was on the same day as Brussels published its formal transition position, revealing the EU's red lines for the next stage of discussions.

Potentially thorny issues include restricting Single Market access and rules out the UK's right to strike deals during the period.

That document appears to have united both Leave and Remain-supporting MPs.

Arch Eurosceptic Jacob Rees-Mogg told Sky News it was "unacceptable", while Liberal Democrat MEP Catherine Bearder said the proposal amounted to being left "on the naughty step". 

During PMQs, Theresa May was asked how she planned to respond to such threats, and she told the Commons "we will be robust".

The Prime Minister added: "As I have said right from the very beginning we will hear noises off, we will hear all sorts of things being said about positions that are being taken. What matters is the positions we take in the negotiations as we sit down and negotiate the best deal. We’ve shown we can do that. We did it in December and we are going to do it again."

After PMQs, May convened her first of two Brexit war Cabinets to thrash out the UK's position.

The Cabinet will meet again tomorrow, and although it is widely hoped that May will be able to set out a clear vision afterwards, business secretary Greg Clark failed to commit to a deadline for when that would be.