UK: Barnier bluffs on Brexit deal for banks

By BLOOMBERG

LONDON • Prime Minister Theresa May believes Michel Barnier (picture) is bluffing when he says there will be no special deal for financial services, officials said, as the UK prepares to negotiate its post-Brexit ties with the European Union (EU).

Two senior officials familiar with the matter privately think the EU’s chief Brexit negotiator is faking a hard-line stance in ruling out a deal that would allow banks to continue operating freely across the bloc.

Talks have yet to start on Britain’s future trade agreement with the EU but Barnier said last month there was no chance of a deal that replicated the easy access that UK-based financial services currently enjoy to the single market.

The UK officials said the French former commissioner was simply setting out an opening position that did not have backing from the 27 other EU member countries.

They said banks based in London will be fine because businesses operating in the EU will need to maintain access to finance after Brexit.

The fate of London’s financial district is urgent for May, who last month agreed to pay a £39 billion (RM211.77 billion) bill to start talks on the nuts and bolts of a transition.

With Britain’s departure from the bloc just 14 months away, businesses are counting on a twoyear adjustment period.

TheCityUK, an industry body, estimates that it employs more than 2.2 million people and contributes nearly 11% of economic output.

Banks including Goldman Sachs Group Inc and JPMorgan Chase & Co are preparing to move staff from London and businesses are taking decisions in the first quarter of 2018 about post- Brexit relocations.

Meanwhile, the Financial Times reported that the UK government is concerned by a French-backed move to limit access for British-based fund managers to EU funds.

President Emmanuel Macron’s goal, the paper said, is to win a slice of the asset management business for Paris.