Bank of England Governor Andrew Bailey last month said the City of London should not expect the EU to open the doors to UK financial services exports after Brexit. He said at a press conference: “On the equivalency, I think it’s fair to say that nothing has really advanced.”
However, in a document of over 1,200 pages, there was very little mention of financial services: a sector which accounts for 7% of the UK economy and 10% of its tax revenues.
Without this recognition, London companies will not be able to access the market.
The intransigence of the EU is not a major surprise because since the United Kingdom decided to leave the bloc, major European capitals like Paris or Frankfurt have tried to take the City’s place as a financial center. from Europe.
According to financial columnist Matthew Lynn, however, it has become clear that the EU has failed miserably in its intentions.
He explained: “No more than a handful of jobs have gone, and most of those who have are just ticking a few boxes to comply with the rules, as this week alone London has started to rethink its rules registration to encourage more tech floats. “
In fact, Mr Lynn insisted, the EU has played its part in a terrible way.
He continued, “Why did it go so badly?
“First, Paris and Frankfurt, as well as Commission officials in Brussels, put too much faith in the rules and regulations.
“As so often, they seemed to believe that they could just legislate the path to commercial success. If they just put enough restrictions on trade and crafted the right kind of laws, then financiers would have no other choice. than to move.
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“And yet, most of these rules can be easily bypassed. If transactions have to be executed through a computer elsewhere, that’s nothing that IT can’t resolve in a matter of days, while if a partner needs to be called to a conference call from another European city which can be arranged at little additional cost. “
Worse yet, Mr Lynn added, when business couldn’t be done in London, it could be moved to New York – which has market access – instead.
He concluded in his report for The Telegraph: “Then it was just carrot and not stick.
“The really bold decision for Paris, Frankfurt or Amsterdam would have been to carve out a financial free trade area, with lower taxes, easier employment rules and lighter regulations (in fact, a bigger Monaco ).
“Now that would have been a threat.
“But Brussels has long forgotten that businesses need incentives. It strictly sticks to the dogma that threats are always enough.”
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In an exclusive interview with Express.co.uk, Italian MEP Antonio Maria Rinaldi echoed Mr Lynn’s claims, insisting the city would emerge stronger thanks to Britain’s withdrawal from the bloc.
He explained: “The City will be even more powerful thanks to Brexit and for a very simple reason: the markets there are much faster and smarter.
“The EU can impose whatever taxes it wants, but in the end it is market competition that will triumph.
“And since the City’s tradition is superior to any other place, it will remain the main European financial center.”
He added: “I wouldn’t worry that much … they said five years ago that Brexit was going to be an apocalypse.
“I think it was a godsend instead.”