The EU’s financial services chief has said Brussels is not trying to steal business and investment from the City of London and that they are not pursuing a protectionist policy on financial services.
Mairead McGuinness, EU commissioner for financial services, also said today that Brussels will look again at equivalence for the City later this year, but that any decision will be based on the “EU’s interests”.
The UK’s financial services industry lost its wide ranging access to EU markets on 1 January, after the Brexit transition period ended.
The vast majority of City firms were expecting this to happen and moved thousands of jobs and more than £1 trillion of assets from London to EU capitals to ensure frictionless trading was maintained.
A wide variety of experts, including Bank of England governor Andrew Bailey, have claimed the EU will try to capitalise on Brexit to move financial services infrastructure and investment to places like Paris, Frankfurt and Amsterdam.
McGuinness told the City Week conference today that this was not the case.
“Our goal is not to move or steal away from London, but to build our own infrastructure,” she said.
“The drive toward open strategic autonomy does not mean navel gazing or protectionism. It is not a zero-sum game where someone else’s gain does not mean someone else’s loss.”
McGuinness’ comments come in spite of statements in the past by French President Emmanuel Macron about how Paris can capitalise from Brexit and overtake London as Europe’s financial capital.
Next week he is inviting bosses from major City banks to the Versailles in a bid to lure business away from London to Paris.
Daniel Hodson, founder of TheCityUnited lobby group, said McGuinness’ comments show “the inability of the commission to speak for 27 disparate nations on many key policy issues”.
“McGuinness’s statement is probably a mainstream [European] Commission view, whereas Macron undoubtedly has more competitive ambitions,” he said.
“The latter’s main difficulty is the City’s global multicurrency multiproduct status as compared with the Euro focused nature of any EU rival.”
The only way the City can regain any of its pre-Brexit access to EU markets is if Brussels grants the UK regulatory equivalence for more than 40 areas.
This is currently considered unlikely as the UK government has indicated it will diverge from EU financial services regulations on a wide number of areas.
The UK Treasury submitted hundreds of pages of equivalence assessments to Brussels last year, which have not yet been scrutinised by the EU.
A Memorandum of Understanding on financial services regulation has been agreed between the UK and EU, which will set up a body for financial services regulators from each side to exchange information about decisions.
McGuinness said that equivalence assessments will begin again after the Memorandum of Understanding has been signed by all EU member states.
“When we do resume our assessments it will be gradual and on a case-by-case basis taking, into account the UK’s decisions and the EU’s interest,” she said.