Brexit may 'ignite true reform' in the EU says MEP
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Ahead of the ratification of the deal, Sven Giegold praised the EU for not allowing the UK to get what it wanted from the Trade and Cooperation Agreement. Although the UK signed the deal in good faith, the MEP insisted Boris Johnson had not been able to keep to his promises over the role of financial services within the agreement. The UK was not granted equivalence by the EU, which sparked praise from the MEP who gloated over the lack of financial access for British firms.
While the UK will now be free to navigate its own post-Brexit freedom out of the EU, Mr Giegold claimed Britain will not be an attractive market even it it drops regulations and taxes in a Singapore-on-Thames model.
In a newsletter, the MEP said: “The UK did not get everything it wanted.
“In the area of financial services, Europe has stood firm.
“Due to the lack of binding rules on money laundering, tax avoidance and financial service providers, the UK hardly gets market access for financial services.
“Because Britain did not want to bind itself to strong common regulations, it now gets worse market access for financial services than for example Japan.
“Boris Johnson has not been able to keep his promises in this key sector of the British economy.”
Following the agreement of the Brexit deal in December, UK financial firms were not given equivalence meaning they must adhere to two sets of regulations.
In further praise of the EU, Mr Giegold said: “Full market access to the EU single market is only possible with binding common standards.
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“Europe has defended its freedom to set higher standards against money laundering and tax avoidance without putting itself at a competitive disadvantage.
“The EU cannot prevent a Singapore-on-Thames, but there will be no open markets for it.”
Due to the EU’s intransigence, some firms have begun to move to the EU due to the difficulties over equivalence.
The EU and UK agreed a memorandum of understanding over financial services to continue talks over the role of the sector in the Trade and Cooperation Agreement.
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Despite this, the EU’s Commissioner for financial services, Mairead McGuinness claimed Brussels was in no rush to grant the City of London equivalence to its financial markets.
She added the EU would never allow the UK to have similar access to what it experienced as part of the bloc.
She said: “I know there probably is an appetite on the UK side for us to sit down and get going
“We are certainly very keen to do that, but we’re not under pressure to do it.”
Despite the threats from the EU, Karim Haji, head of Financial Services at accountancy giant KPMG said the UK will not lose its role as a giant in the financial sector.
Mr Haji said: “If you take a step back, the UK has been one of the leaders in financial services regulation and infrastructure, it’s one of the key innovators in the space as well, and one of the leaders in the world.
“That’s why the UK has been successful in exporting financial services – that isn’t changing as a result of Brexit.
“The regulatory regime that we had before Brexit and today is by and large the same, and many of the regulations that we talk about in terms of EU regulations, the UK was not only an active participant but quite a leading thinker.
“The relationship between the UK regulators and the European regulators is still strong.”
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