Punishing the City of London in Brexit negotiations will backfire on other EU cities, European officials warn
Leaked EU Parliament committee report offers huge boost to Theresa May as it advises Brussels to strike 'workable' deal
VENGEFUL EU leaders will clobber their own economy if they punish the City of London in Brexit talks, European officials have warned.
A leaked EU Parliament committee report warns it is “in the interest” of Brussels to strike a “workable” agreement on financial services.
And it says consideration should be given to guaranteeing ‘passporting’ rights for banks in the City to avoid a hammer blow to markets.
The report is a huge boost to Theresa May just weeks ahead of the likely start of Brexit talks.
The passporting regime allows London-based institutions to operate across the 27 member states on the Continent and make Euro-denominated trades.
The report says: “Given the considerable interdependence between the UK and the EU economy and financial systems, it is critical that a workable agreement is achieved that not only maintains high regulatory standards but also delivers growth and jobs across the EU.”
It added: “A badly designed final deal would damage both the UK and other 27 EU member states.”
The City currently provides 75 per cent of foreign exchange trading for the EU and 75 per cent of all hedging products.
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The leak comes less than three weeks after Michel Barner, the EU’s chief negotiator was said to have told MEPs he wanted a “special” deal over access to the City for the remaining 27 member states.
He later denied making the remarks and said that he was talking about the need for “special vigilance” over the risks to the money markets.
Bank of England Governor Mark Carney last month claimed Brexit posed “greater short-term risks” for the Continent than the UK.
He has called the UK the EU’s “investment banker”.