British financial firms may lose their passporting rights after Brexit if the UK doesn’t agree to EU terms

From: RegTech Analysis

The EU might block UK financial firms’ access to the European markets unless the UK agrees to its conditions.

Andrej Plenković, prime minister of Croatia, which has taken over the EU presidency, has said that he would not exclude switching off the City’s access to European markets if the UK and the trading bloc cannot agree on their relationship past Brexit, The Guardian reported.

“I wouldn’t go into the vocabulary of weapons but what I have learned in international and European negotiations [is] that all arguments and considerations are treated as political,” Plenkovic said when asked about what lengths the EU would go to whilst negotiating with the UK.

The statement came as Boris Johnson has stated that there will be “no alignment” with EU laws after Brexit.

Ursula von der Leyen, president of the European Commission has previously urged UK negotiators to remember that there are consequences to diverting too much from the trading bloc’s regulations.

“We have to find a good balance between divergence and being close to the single market,” she said after meeting with the British prime minister. “There is a difference in being a member state and not. And there are trade-offs between regulatory divergence on one side and access to the single market. This room now has to be explored in the coming negotiations. In June we will take stock of the progress.”

After von der Leyen met Johnson last week, a Downing Street spokesperson told The Irish Times that the prime minister wanted “a broad free trade agreement covering goods and services, and co-operation in other areas” but that “the UK would not extend the implementation period beyond December 31st, 2020; and that any future partnership must not involve any kind of alignment or ECJ jurisdiction.”

The spokesperson also said Johnson wished to start negotiating a free trade agreement based like the one set up between the EU and Canada as soon as possible after January 31.

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