France has threatened to keep the City of London out of EU markets post-Brexit if the UK does not increase access to its waters for the country’s fishermen.
France’s European affairs minister Clement Beaune today hit out at the UK’s post-Brexit fishing arrangements, saying there would be “retaliation measures” taken if the UK does not “deliver licenses [and] authorisation to access their waters for fishing”.
Beaune cited financial services access as a weapon the EU could use against the UK in the row.
“We will give none – it is quid pro quo,” he said.
It comes after Mairead McGuinness, the European Commissioner for financial services, said last week that Brussels will “not be recreating access to the single market for the UK as they have chosen to move out”.
Post-Brexit access to the EU
It has long been expected in the City that the UK would lose its pre-Brexit access to the EU, leading to trillions of assets and thousands of jobs moving from London to European capitals.
The UK’s financial services sector lost its wide-ranging access to EU markets when the Brexit transition period ended on 31 December.
The only way the City of London can maintain its pre-Brexit access to the EU is if Brussels unilaterally grants regulatory equivalence, however the bloc believes the UK is destined to diverge from its financial services regulations and has withheld the designation.
Some groups, such as new City lobby group CityUnited, has called for the government to ditch concerns about equivalence and to instead pivot toward other overseas financial markets.
Bank of England governor Andrew Bailey recently said equivalence was the best case scenario for the financial services sector, but that it wouldn’t be worth it if the UK had to be a regulatory rule taker.
Lord Jonathan Hill recently unveiled a review for the government that called for a change the UK’s share listing regime and for regulators to allow Special Purpose Acquisition Companies (Spacs) to list in London in a bid to maintain the City’s global competitiveness.
hanges like this would not be possible if the UK were to stick to EU rules and try to gain equivalence.
Bailey said the UK must not become a mere “taker” of EU rules in return for access.
“If the price of this is too high then we can’t just go for it whatever,” he said.