EU hits back at City as Brussels dismisses Sunak – UK wont be granted access anytime soon

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Top eurocrat Mairead McGuinness dismissed complaints by Chancellor Rishi Sunak that the EU was unfairly blocking access to its markets. The European Commissioner for financial services argued decisions were being made on the premise Britain is going to diverge from the bloc’s rules. She was speaking after Mr Sunak told an audience Britain will continue to have one of the world’s most robust regulatory regimes for financial services.

Ms McGuinness said: “I took note of the Chancellor’s statement.

“I think in the long run we are expecting the UK to diverge.

“That’s been their mantra because of Brexit.

“So therefore we have to be careful not to grant equivalence on what exists today, but to look at what the future might hold, and always looking at what is in the interests of the European Union and our financial stability.”

In a speech at Mansion House yesterday, Mr Sunak revealed the UK and EU have not reached an agreement for mutual recognition of financial services rules since Brexit.

Ministers had hoped to sign a “memorandum of understanding” by March.

The Chancellor said: “That has not happened.”

In a direct challenge to Brussels, he suggested the bloc’s claim Britain’s standards were set to slip ws wide of the market.

He said: “The EU will never have cause to deny the UK access because of poor regulatory standards.

“The UK already has one of the world’s most robust regulatory regimes…and our plan is not to weaken but strengthen that.”

He added: “I see no reason…why the UK cannot…continue to provide clearing services for countries in the EU and around the world.”

Financial services were largely left untouched by the EU-UK post-Brexit Trade and Cooperation Agreement.

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The EU has yet to decide how much direct access the City of London should be granted to its markets in the future.

This is seen as a move by Brussels to shift power and influence away from the UK and help bolster the bloc’s own financial hubs.

The European Commission has provided interim access, allowing City firms to provide euro clearing services until June 2020.

Ms McGuinness said: “In the interim, we’re working with experts to see, is that a vulnerability for the European financial system, and what is it we need to guard against that vulnerability in the system?”

She added: “We’re not looking at equivalence yet.

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“We will be setting up a forum where we will discuss these issues.

“But the difference between the discussion on a trade agreement and the discussions on the financial system, is they will be done on a case by case basis.

“There’s no urgency. On January 1, when this new regime kicked in, there was no instability and there’s no instability on July 1. That’s what we want to maintain – stability.”

In the meantime, Britain is working on new agreements with Singapore and Switzerland.

Mr Sunak revealed there have also been discussions with “our closest ally” the US over financial services cooperation.

And he said the UK must have a “mature and balanced relationship” with China that recognises its international influence but “takes a principled stand on issues we judge to contravene our values”.

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