The European Union needs a “masterplan” to move euro financial services and jobs from London’s Square Mile to the Continent in order to expand the single currency’s role globally, according to a senior EU politician.
Markus Ferber, a senior member of the European Parliament, said if the EU wants to compete with the dollar, it needs a financial system to match it, City AM reports.
The comment comes as UK chancellor Rishi Sunak promised that London’s financial centre would seek to “do things a bit differently” now that it is free of EU regulations.
From the UK to the EU
The EU needed “a clear step-by-step masterplan that helps key financial sector businesses move from the United Kingdom to the European Union,” Ferber said.
He spoke as a new European Commission paper was set to promote the global role of the euro and set out ways to rely less on the City of London after Brexit.
The paper recommends better enforcement of EU sanctions and suggests other changes that could undermine London’s standing as a financial centre.
This could make it less likely that the EU will grant UK financial services access to the EU beyond the temporary access it has granted for derivatives clearers to mid-2022.
Understanding by March
According to International Investment, the UK’s financial services sector expects damage, but not disaster, from the Brexit deal.
London and Brussels have pledged to agree on a memorandum of understanding on regulatory co-operation and equivalence by March.
London’s new regulatory autonomy
Meanwhile, chancellor Rishi Sunak has promised the City it would seek to “do things a bit differently”. Sunak claims that new regulatory autonomy in London could give the sector a boost and has told MPs Brexit will help “reinforce the UK's position as a globally pre-eminent financial centre”.
In a split from EU policy, the Treasury announced it will draft legislation to bring trading in Swiss shares back to London in the coming weeks. The trading was banned by the EU in 2019, but as a non-EU member the UK will be able to facilitate Swiss stock trading.
Nestlé and Roche, two of the five most traded shares in Europe last year, are among the hundreds of Swiss stocks that will be available to trade in London.
Back the City
However, current London Mayor has said the £132bn financial sector had been let down by the Brexit deal and called for greater certainty for the City.
Writing in the FT, Khan said that the antipathy shown to financial services would hurt the whole country.
“It is a myth that only those who work in the Square Mile and Canary Wharf benefit from the sector,” he said. “In reality, fewer than four in ten who work in financial services do so in Greater London. Nearly 100,000 jobs are in the north-west, and 75,000 are in the Yorkshire and Humber region.”
He called on politicians and businesses to speak up now to push the government to secure improvements to the Brexit deal for financial services and also oppose any race to the bottom through deregulation.
