Future relation between the EU and the UK discussed in European Parliament

Barnier told the European Parliament that the EU will grant equivalence to particular sectors of its financial services industry but he said that there will not be “general, open-ended” equivalence in financial services.

Michel Barnier said “Wherever possible we will grant equivalence on particular sectors of the financial industry. That is what we did with Canada, that’s what we do with the United States and Japan, and it works. So I don’t see why it shouldn’t work with the United Kingdom.

And I would like to take this opportunity to make it clear to certain people in the United Kingdom … that they should not kid themselves about this. There will not be general, open-ended, ongoing equivalence in financial services. We will keep control of these tools and we will retain a free hand to take our decisions.

That means one of the UK government’s demands has been shot down immediately. In fact today chancellor Sajid Javid, told the Financial Times saying that he has confirmed that the UK wants an equivalence regime that would offer long-term stability (normally the EU can unilaterally revoke equivalence agreements at short notice, sometimes after just 30 days), but he does not use the word “permanent”. We hope to agree a chapter on financial services in the UK-EU free trade agreement that establishes a baseline for the trading relationship. This should establish regulatory cooperation arrangements with the EU that facilitate dialogue and reflect the degree of access between both markets.

“If the EU, like us, wants a durable relationship, we should also include measures to directly address the long-term needs of industry for a reliable equivalence process. This would provide the certainty on which internationally mobile businesses can depend”, Barnier said.

Barnier said that the UK will be welcome to carry on participating in various EU programmes, like Erasmus, if it wants to. But the legal and financial framework will be different, he said.

Earlier, the European Commission President Von der Leyen praised Johnson for celebrating the importance of free trade in his speech and also the aspects of Social Improvement and Climate Action.

European Commission President Ursula von der Leyen however said that she was “a little bit surprised” that Boris Johnson cited the “Australia model” as a potential blueprint of a post-Brexit trade relationship between the U.K. and the EU.

“Australia without any doubt is a strong and a like-minded partner, but the European Union does not have a trade agreement with Australia. We are currently trading on WTO [World Trade Organization] terms,” she said during her speech in the European Parliament.

“If this is the British choice, well, we are fine with that, without any question. But in fact we are at the moment agreeing with Australia that we must end this situation … Of course the United Kingdom can settle for less, but I personally believe that we should be way more ambitious.”

Via Financial Times / The Guardian / European Parliament / Politico