Latest posts by Julia Shudrik (see all)
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Michael Fuchs, a German lawmaker and an alliance partner of Chancellor Angela Merkel, has stated that the European Union has no intention of changing the rules to retain the access to the City of London once Britain has left the bloc.
In a Bloomberg interview on Tuesday Fuchs announced that the system of law for passporting is directed at banks located in an EU country, and making any new arrangements is said to be pretty tough. He said that the rules of passporting which authorise any bank incorporated in any EU member state to sell its products and services throughout the $19 trillion integrated economy are beyond negotiations.
It is a curt refusal to such lobbies as the British Bankers’ Association, which says that its aim it to preserve “the current full level of access to the EU market.”
Theresa May has said she is ready to fight for the City to preserve its passporting rights, but the majority of lawyer and bankers do not support her saying that the battle for winning a concession from EU partner is too hard to win.
Fuchs stated that “is will not be an easy game”
On the 23 of June the British voted for exit from EU, after remaining its member for over 4 years, and now the biggest challenge for May is to avoid the isolation for U.K.-based banks.
The future relations between the U.K. and the EU are still up in the air, the other members of the US are searching the ways to chart the way forward.
This week Merkel is hopscotching Europe in order to canvass opinion before leaders of all 28 EU countries meet for a post-Brexit summit in Bratislava on Sept. 16. Having spoken with French President Francois Hollande and Italian Prime Minister Matteo Renzi, Merkel is now heading for Estonia, Prague, and Warsaw, other meetings outside Berlin with eight other EU government chiefs, are to follow.
On Monday Merkel met with Hollande and Renzi abroad an Italian aircraft. The venue was chosen to showcase the unity in times of the Europe’s crises. After the meeting, Merkel said, “We respect Britain’s decision but naturally also want to make it clear that the other 27 are working for a prosperous Europe”.
May tried to win time to let her government build a team and to get ready negotiating its positions. A government official announced last week that the Foreign Ministry in Germany is currently creating a list of topics for the EU’s Brexit talks.
The German official, who asked to stay anonymous, expressed its frustration with a lack of feedback from London and mentioned that U.K. government seems to underestimate the complexity of the talks which are to be discussed.
Fuchs said that negotiations on access for U.K. banks will “require a lot of effort.” As an example of future complications, he cited a legal bar to allowing the banks located in London to regulate initial public offerings in the EU after Brexit. Fuchs claimed that since the passporting agreement also comprises non-EU countries Norway, Liechtenstein and Iceland, the banks working in the EU have to stay under the EU supervision and cannot be controlled by London with the UK no longer being a member.
“I really think this is something that’s not negotiable, the so-called banking passport,” he said.
Influential banks and their European headquarters in London will soon start relocating. They are expected to move jobs from the U.K within a few weeks after Brexit.