Business correspondent(es/wp):
A senior figure at the European Commission has issued a stark warning for the future of the City of London if Britain leaves the European internal market, ramping up the rhetoric ahead of Brexit negotiations.
Vice-president Valdis Dombrovskis warned that leaving the market as well as the European Union “would have serious effects” for the capital’s financial centre.
In an interview with German newspaper Handelsblatt, Dombrovskis said the EU would not allow Britain to “cherry-pick” in Brexit talks by abandoning the free movement of labour while keeping free access to EU financial and capital markets.
“At the moment, British banks only need a licence for one EU state to be able to be active in all member countries. The banks would lose this EU passport if Britain no longer wants to completely respect the rights and duties of the European internal market after it has left the EU,” he said. Britain is yet to trigger Article 50 of the EU constitution, which would effectively rubber-stamp its intention to leave the 28-country union
However, a big concern for lenders is making sure the UK retains access to the European banking passport system which would allow business to be conducted across the union.
Dombrovskis’ comments came after Anthony Browne, chief executive of the British Bankers’ Association, this week said that unless a transition framework is put in place banks would soon have to decide whether to move operations to Europe, as such shifts could take several years to implement.
He added that Britain should negotiate transitional arrangements to avoid “cliff edge” disruption to financial markets
A senior figure at the European Commission has issued a stark warning for the future of the City of London if Britain leaves the European internal market, ramping up the rhetoric ahead of Brexit negotiations.
Vice-president Valdis Dombrovskis warned that leaving the market as well as the European Union “would have serious effects” for the capital’s financial centre.
In an interview with German newspaper Handelsblatt, Dombrovskis said the EU would not allow Britain to “cherry-pick” in Brexit talks by abandoning the free movement of labour while keeping free access to EU financial and capital markets.
“At the moment, British banks only need a licence for one EU state to be able to be active in all member countries. The banks would lose this EU passport if Britain no longer wants to completely respect the rights and duties of the European internal market after it has left the EU,” he said. Britain is yet to trigger Article 50 of the EU constitution, which would effectively rubber-stamp its intention to leave the 28-country union
However, a big concern for lenders is making sure the UK retains access to the European banking passport system which would allow business to be conducted across the union.
Dombrovskis’ comments came after Anthony Browne, chief executive of the British Bankers’ Association, this week said that unless a transition framework is put in place banks would soon have to decide whether to move operations to Europe, as such shifts could take several years to implement.
He added that Britain should negotiate transitional arrangements to avoid “cliff edge” disruption to financial markets
