After long and tortuous negotiations, the UK and European Union are finally reaching the endgame of the transition period.
Whatever the outcome, the current global crisis caused by the pandemic has shone a light on how, even post-Brexit, there will be many areas which will require collaboration on both sides of the Channel.
The pandemic has presented huge public health, social and economic challenges to both the UK and the EU. As we try to recover from the virus, restabilising the economy will be key for households and businesses.
City institutions and our capital markets both have a vital role to play in financing this recovery. Open and internationally connected markets will support economic growth — and this will also require building capital market capacity in Europe.
The UK has left the EU, but nonetheless our relationship with European neighbours will continue to be important. Aside from our geographical closeness, there are a number of shared challenges we must confront, including climate change and how to respond to the increasing digitalisation of the economy. Tackling these will require international action and ongoing cooperation between the UK and our European partners.
The City will be a key ally in achieving key green objectives through better climate-related disclosure and improved management of environmental financial risks to help investors, as well as mobilising the capital needed to catalyse the net-zero transition.
As the EU and UK build a new relationship, both sides will have to adapt. This new chapter should be underpinned by the principles of innovation, collaboration, and sustainability. In doing so, we can work closely to resolve shared issues, current or future.
That is why, as we go forward, it is vital that a strong dialogue is maintained to avoid unintentional fragmentation or divergence. Keeping an open and clear channel of communication would allow each side to discuss their legislative plans and assess the impact as the process develops.
Naturally, both the UK and the EU will be looking to protect their own interests, and both have announced their intention to undertake legislative reviews. This inevitably means that there will be some level of divergence, and we will become competitors in some areas.
However, competitors need not be opponents — such a relationship can even be healthy.
Now is the time to draw a line under the discussions around the UK’s departure from the EU and focus on how to build our future relationship together. This is vital for households and businesses on both sides of the Channel, not just for the financial services sector in the City itself but across the entire continent. Successful financial markets in Europe will benefit the UK and vice versa.
We believe that both the EU and UK can succeed and thrive, and it is our hope that this can be done on the basis of a positive relationship between each side. Now is the time to open a new chapter and make that vision a reality.
Main image credit: Getty