EU Brexit chief wants vigilance for British firms

EU officials said Barnier was emphasising that Brussels would have to take special care

The European Union’s Brexit negotiator Michel Barnier said on Saturday that the EU will demand “special vigilance” before letting British financial firms access the bloc because of the large risk London could pose to the EU’s financial stability.

Responding to a report in the Guardian which said he had told EU lawmakers that he wanted a special deal to maintain EU firms’ access to the City of London, Barnier tweeted: “When asked on equivalence I said: EU would need special vigilance on financial stability risk, not special deal to access the City.” An EU spokesman said the Guardian report did “not correctly reflect” Barnier’s comments to a closed door meeting with members of the European Parliament last week.

EU officials said the point Barnier was making when asked about Brussels’ willingness after Brexit to recognise British financial regulations as “equivalent” in rigour to those of the EU was that, as a lot of EU business was likely to still pass through the City, EU equivalence rules would have to be much more tightly drafted compared to those for smaller centres.

The Guardian quoted minutes prepared by parliamentary aides as saying Barnier told lawmakers: “Some very specific work has to be done in this area ... There will be a special/specific relationship. There will need to be work outside of the negotiation box ... in order to avoid financial instability.” EU officials said Barnier, a Frenchman who ran EU financial services policy, was not speaking of a “special deal” to limit the impact of Brexit on financial services trade between Britain and the EU but rather emphasising that Brussels would have to take special care not to ignore stability risks in London.