Barnier warns UK financial services industry on passporting rights post-Brexit

UK banks and insurance companies could stand to lose their ability to passport their services into the European Union  after Brexit, the EU’s chief Brexit negotiator Michel Barnier has warned, in a speech yesterday.

“On financial services, UK voices suggest that Brexit does not mean Brexit,” he said, in a speech delivered to a Centre for European Reform conference.

“[But] Brexit means Brexit, everywhere.”

Nor, he said, would there be opt-ins permitted to certain industries.

Said Barnier: “The legal consequence of Brexit is that UK financial service providers lose their EU passport. This passport allows them to offer their services to a market of 500 million consumers and 22 million businesses.”

The EU, he went on, will prioritise the welfare and financial security of its constituent members, whatever that meant for cross-border trade.

“We will not compromise on financial stability – we will never compromise on financial stability – in the EU and in the Eurozone…

…The integrity of the Single Market is not negotiable. The Single Market is one of our main public goods.”

Barnier’s comments will be seen with concern by some UK businesses with sizable businesses in mainland Europe, which have been hoping that little will change for them once Britain leaves the EU. This morning, media commentators described his speech as one of the most detailed indications to date as to how the EU views its trading future with the UK post-Brexit.

‘Access ≠ part of’

Access to the EU’s Single Market, which the UK “will, of course, have” post-Brexit, Barnier went on, “is different from being part of the Single Market”.

“And a good deal on our future relationship should facilitate this access as much as possible,” he added.

“And avoid a situation where trade would happen under the WTO rules for goods and services.

“To achieve this, there is a third key: we need to ensure a level playing field between us.

“This will not be easy. For the first time ever in trade talks, the challenge will be to limit divergence of rules rather than maximise convergence.

“There will be no ambitious partnership without common ground in fair competition, state aid, tax dumping, food safety, social and environmental standards.”

“Some in the United Kingdom say that specific rules for Northern Ireland would endanger the integrity of the United Kingdom single market,” Barnier added at another point, referring to comments made by the British minister for Northern Ireland two weeks ago.

“I expect the United Kingdom, as co-guarantor of the Good Friday Agreement, to come forward with proposals.”

Northern Ireland

Barnier also addressed the Northern Ireland issue, saying that the UK needed to come forward with proposals aimed at avoiding a hard border with Ireland.

“I know that this point is politically sensitive in the UK,” he said.

“It is not less sensitive in Ireland.

“Some in the UK say that specific rules for Northern Ireland would ‘endanger the integrity of the UK single market’.

“But Northern Ireland already has specific rules in many areas that are different to the rest of the UK.

“Think of the ‘all-island’ electricity market, or of the specific regulations for plant health for the whole island of Ireland.”

To read Barnier’s speech on the website of the Centre for European Reform, click here. 

Ridhima Sharma
Ridhima Sharma is Correspondent for InternationaInvestment. She speaks German and is also DACH Correspondent for InvestmentEurope. She has more than 8 years of experience in the media industry. Before joining us, she was working in India and covering automotive and lifestyle sectors. Over the years many of her stories have been published in various magazines across India.

Read more from Ridhima Sharma

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