Michel Barnier has spoken at the Eurofi General Assembly on UK/EU relations. He noted the desire to give the EU/UK negotiations “every chance of succeeding”. He noted he had rescheduled many other meetings to have these talks. He then focused on:
- equivalence – which he noted is an autonomous, unilateral tool and not part of the current negotiations; and
- the financial services chapter in the Free Trade Agreement.
He noted that the UK’s proposals are “unacceptable” to him, as they would severely limit the EU’s regulatory and decision-making autonomy if there were to be a legally enforceable regulatory cooperation framework, if equivalence withdrawal decisions were co-managed and if the scope of the prudential carve out were to be limited. He also said it is unacceptable for the UK to try to keep as many single market benefits as it can = with proposals for service suppliers to fly in and fly out, and its proposals on back office functions that he says would create a significant risk of circumvention of financial services regulation. He was also critical of the UK’s wish to ban residence requirements for senior managers and boards, so that all essential functions could stay in London.
On equivalence, he said the UK has been sent 28 questionnaires, of which it has answered 4, so there is a lot of work to be done.
He warned that there will no no extension to the transitional period, and reminded firms that EU law does not provide the mechanisms for all equivalences that the UK might want – and that nothing in the FTA would change the fact that UK firms providing services not subject to equivalence would need to apply for authorisation to carry them on in the EU.