City policy chief calls out EU on hardline stance - but warns EU27 unity might wane

 
Helen Cahill
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Catherine McGuinness, policy chairman at the City of London Corporation

The City of London’s policy chief has raised concerns that the EU “isn’t signalling receptive messages” on financial services, but has suggested the EU’s unity may deteriorate as negotiations progress.

Michel Barnier has drawn criticism from the UK for saying that financial services could not be included in a free trade agreement between the EU and the UK, and that a transitional agreement was not a “given”.

Catherine McGuinness, policy chairman at the City of London Corporation, said there was still a “bit of persuasion to be done” to secure market access for the Square Mile.

Read more: The official date of Brexit may be closer than you think

Speaking to City A.M., McGuinness said: “It is worrying that we’ve got an EU27 that isn’t, for whatever reason, receptive, isn’t signalling receptive messages at the moment on some of these key issues that we want to address as well. So I think we’ve got a lot of work to be done. ”

She said the EU27 countries were “very united on the whole”, but added: “I think that might change over the course of this year when people start looking at the details of what settlement is proposed.”

Chancellor Philip Hammond will seek to woo European partners over the next two weeks on a tour of EU capitals, including Oslo, Stockholm and Madrid.

City A.M. understands ministers are also stepping up their diplomatic efforts with EU member states directly, as part of a strategy to push back against Barnier’s increasingly hardline rhetoric.

Last week, Barnier and Brexit secretary David Davis became locked in a war of words over the transition agreement, the most public disagreement of the two sides during negotiations so far.

Read more: Sterling slumps after Michel Barnier says Brexit transition "not a given"

Leaked EU documents showed the bloc was planning to introduce a punishment clause into the agreement if the UK did not abide by EU laws. Under EU plans, the UK would be stripped of Single Market access if it digressed.

Davis accused the EU of being “discourteous”, and said the European commission was acting in bad faith.

Barnier hit back, saying: “My attitude has not been in the least discourteous. It is totally foreign to my state of mind.”

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