D.Andrew Bailey, President of the Bank of England, spoke very clearly about the negotiations between London and Brussels on mutual recognition of financial market rules. “I am afraid that the rules and standards we have in the UK will not work in a world dictated and determined by the European Union,” Bailey told the annual Mansion House address on the Internet in London on Wednesday evening.
The head of the central bank said it was not possible for London to approve Brussels’ demands. He warned that if the EU tried to pull the UK financial sector out of its market, it would be a mistake.
Bailey also faced fears that London could become a “Singapore in the Thames” by tightening financial market rules and low taxes. “Let me be clear: none of this means that Britain can create a less regulated, more risky, financial center and system,” the governor said.
Not out of town
Services were not included in the negotiations on the Brexit trade agreement between the EU and the UK. British financial services providers lost automatic access to the EU’s internal market at the end of the Brexit transition phase earlier this year.
This did not lead to great fear from the City of London, but many banks and other companies established branches in cities such as Paris, Dublin, Amsterdam and Frankfurt. About 7000 jobs were relocated with them. By March, the two sides want to reach an agreement on mutual recognition of standards known as equilibrium. The overall service sector accounts for 80 per cent of the total value of the UK.
EU criticizes Brexit implementation
At the same time, the European Union accused Great Britain of failing to implement the Brexit agreements. In a letter to British Foreign Secretary Michael Gove, Maros Shefkovic, vice-president of the European Commission, criticized the failure to comply with agreements between Northern Ireland and other parts of the United Kingdom to restrict the movement of goods and people. He also criticizes misinformation from traders and EU representatives’ lack of access to customs data. Shefkovic writes that he thinks there are dental problems that can be solved quickly.
The letter exploded because the EU Vice President released it just hours before his meeting with Cove in London. The British side wants to actively support the relaxation of the so-called Northern Ireland Protocol this Thursday in order to mitigate the negative impact on the economy. Cove, for example, has demanded a substantial long break in an equally bad letter – otherwise threatened “in all available ways”.
“Shock and Anger”
In response to a letter written by Chefkovic that evening to a government spokesman in London, the EU said it was “disappointing” that it had failed to recognize “shock and anger” in northern Irish society. In the Northern Ireland Protocol to the Brexit Treaty. Brussels also failed to note that “urgent measures to restore confidence” had become necessary.
This protocol provides for the island to be a common economic region and for Northern Ireland – unlike other parts of the United Kingdom – to adhere to the rules of the EU Internal Market and Customs Union. Therefore, restrictions must now be imposed on ports when goods cross the sea from Great Britain, for example to Belfast in Northern Ireland. This creates a freight border between Northern Ireland and the rest of the Kingdom.
In a controversy over the distribution of vaccines, Brussels briefly considered deleting section 16 from the protocol, which may temporarily violate certain sections of the regulation. This was seen as the EU’s willingness to accept restrictions on the In-Irish border. Brussels returned quickly, but the damage had already been done.
The main purpose of the protocol is to prevent restrictions between the European Union, Ireland, and British Northern Ireland. Such restrictions could shake the weak peace process in Northern Ireland. Proponents of unification with Ireland and those in favor of unification with Great Britain have been waging a bloody civil war for decades.
During the Brexit talks, London had long speculated that the EU would agree to carry out tests on any goods. For the EU, however, it would have been a dangerous precedent and a back door for goods that could have been smuggled unnoticed into the European domestic market and customs from the UK via Ireland.