Earlier this month, Bank of England Governor Andrew Bailey 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.
The French sent constant delegations to London to visit the boardrooms, while Frankfurt set up special schools for all moving banking families.
Even before Brexit, France was trying to sideline London.
In 2012, the former Governor of the Banque de France, Christian Noyer, said that London should have been stripped of its status as the main European financial center and sidelined to allow the euro zone to ‘control’ transactions. within the block.
Mr Noyer told the Financial Times that there was “no reason” to allow the eurozone’s financial center to be “offshore”.
He said: “Most of the euro trading should be done inside the euro area. This has to do with the ability of the central bank to provide liquidity and to oversee its own currency.
“We are not against some business being done in London, but most of the business should be under our control. This is the consequence of the UK’s choice to stay outside the eurozone.”
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Mr Noyer’s broadside was one of many outspoken public attacks launched by the French rulers against Britain at the time.
Shortly before Standard and Poor’s removed France’s AAA credit rating earlier that year, Mr Noyer said Britain’s rating should have been downgraded before France’s because the UK had “as much debt, more inflation, less growth than us”.
Jean-Pierre Jouyet, the former head of the French financial regulator, called the right wing of British politics “the dumbest in the world”.
EU chief Brexit negotiator Michel Barnier was also actively trying to undermine London’s strength as a European financial center at the time.
In 2010, the former French minister was appointed European Commissioner for the Internal Market and Services and was tasked with cleaning up the financial services sector in Europe.
In Britain, Mr Barnier was immediately criticized.
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The main accusation seemed to be that he was more likely to side with then-President Nicolas Sarkozy than he was with financial sector executives under pressure in London.
As the Daily Telegraph puts it, “the Frenchman was seen as a threat.”
The UK’s fears also appear to have been justified.
Financial Times EU correspondent Alex Barker noted in a 2011 report how the myriad of Brussels proposals left the UK financial world in shock and that ministers saw such measures hurt the sector or weaken the economy. UK regulatory powers.
This nervousness would have burst into broad daylight, David Cameron complaining that the city was “constantly under attack”.
For the former Prime Minister – and figures from the UK financial industry – the problem was not a single issue but rather a worrying trend.
Anthony Belchambers, managing director of the London-based Futures and Options Association, told the publication at the time: “Red tape, ill-informed tax initiatives, protectionist policies and high ‘pass-through’ costs will hurt the market. international reach of the City. “
Mr Barker also pointed out that the underlying alarm in London was a more visceral fear; that Mr Barnier and his supporters had used the regulatory system to undermine London’s strength as a European financial center.
The EU correspondent wrote: “Already rivals like Paris and Frankfurt are on the move.
“British Treasury officials are suddenly responding to calls from companies offering tax breaks to locate in the French capital.
“Regulators are debating whether to allow NYSE Euronext to merge with Deutsche Börse, giving the world’s largest stock exchange a Dutch mailing address and tremendous reach across Europe.
“France and Germany” see the city as ripe for looting, “in the words of a European official.”
“‘The British are only realizing it’, adds the official.
“And in some cases, it’s too late. “
“Moreover, analysts warn, the drive for tighter economic governance in the eurozone could leave Britain on the sidelines of an EU realignment, with lasting consequences for the City.”
Mr Barnier has always called the complaints against him “nonsense”.