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Leading Tory Brexiteer Andrew Bridgen has warned that EU not to test the UK, since Brussels “needs us more than ever before”. The EU’s huge €750bn recovery fund, to help members states rescue their economies from the pandemic, relies on the Brussels’ bloc raising money on the capital markets. Mr Bridgen told talkRADIO that this plan needs London’s financial capital markets in order to succeed, raising the possibility that this could be used as a pawn in the Brexit talks.
He said: “The EU has a huge requirement to raise money and well, where is the financial capital of the world?
“I think it’s in the UK, and staying in the UK, and I think the EU are falling out with it.
“They need us, because of the stresses COVID-19 has placed on businesses, to raise money on the financial markets.
“They need London more than ever. It’s a bad time to fall out with us actually.”
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This week, the EU unveiled plans to stop relying on City of London after Brexit amid fears of being left vulnerable by the UK’s political decisions.
Brussels fears that London could pose a threat to its ability to set financial rules and regulations after it leaves the transition period.
On Thursday, the European Commission warned that EU must wean itself off its dependence on the City of London for access to capital markets.
London is Europe’s biggest capital market, but Brexit means that the EU’s major source of capital will be outside the EU’s regulatory framework, sparking panic among officials in Brussels.
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A Commission statement read: “Brexit has a significant impact on the Capital Markets Union.
“It further strengthens the need for the EU to have well-functioning and integrated capital markets.”
Valdis Dombrovskis, executive vice-president of the European Commission, explained: “This is particularly important in light of Brexit, as Europe’s biggest financial centre is leaving the single market.
“Brexit has made it more urgent – there are specific risks which we are seeing with so much financial activity now effectively moving out of the EU.”
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Mr Dombrovskis admitted that the EU’s dependency on financial centres outside the EU was “one of the reasons why we are developing capital markets”.
The EU plans to have a number of lesser financial centres spread around the bloc after Brexit, rather than a single hub in London.
Later in his interview, Mr Bridgen warned that countries like Italy and France are the most likely to leave the EU out of the 27 remaining member-states.
TalkRADIO co-host Ash Gould added that “the EU must be teetering on the edge” as coronavirus takes its toll on the European economies.
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