Brexit Bulletin: Don’t Kid Yourselves
Brexit Bulletin: Don’t Kid Yourselves
(Bloomberg) --
What’s Happening? Two days into the week, two punchy quotes from the European Union’s Brexit chief.
After pouring cold water on Monday on British government ambitions to strike a post-Brexit free trade deal without signing up to binding agreements on mutual standards, Michel Barnier found himself in a similar position on Tuesday, this time on the issue of financial services.
“Certain people in the U.K. should not kid themselves about this: there will not be general, ongoing open-ended equivalence in financial services,” Barnier told the European Parliament in Strasbourg. “We will keep control of these tools, and we will retain the free hand to take our own decisions.”
Barnier was rebuffing calls from the U.K. government for London’s financial services firms to enjoy long-term access to the single market even if the country breaks away from the bloc’s rules after Brexit. He spoke after a photograph emerged of a document, carried by Chancellor of the Exchequer Sajid Javid into Downing Street on Monday, with details of a plan for so-called “equivalence” for financial services.
We’re in the early stages of the post-Brexit power play, and there’s posturing going on on both sides. With formal talks yet to start each party is sticking to its guns. The U.K. says it wants a wide-ranging deal but with the right to diverge from EU rules; the EU insists that it cannot cut a deal for Britain that looks anything like EU membership. There are occasional outbreaks of realism, but Javid and Barnier are in large part still playing to the gallery.
At some point in the coming weeks and months the contest will have to begin in earnest.
Beyond Brexit
- Things are falling apart for Europe’s single currency, John Authers writes for Bloomberg Opinion.
- A cruise ship without any cases of coronavirus has been refused entry to five ports, and has nowhere else to go.
- Five hedge fund bosses made more than $1 billion each last year—despite three lagging the S&P 500.
Brexit in Brief
Stagnant | The U.K. economy failed to grow in the fourth quarter of 2019, in line with expectations, though an encouraging December hinted at a bounce in the wake of Johnson’s general election victory.
Full Speed Ahead | Johnson approved a controversial high-speed rail project linking London with cities to the north, despite soaring costs and mounting anger from his own Conservative Party colleagues. Johnson believes the new High Speed 2 line, which could cost more than £100 billion ($129 billion) in total, is vital to revive the economy in “left behind” communities that backed Brexit and then voted Conservative in last December’s election.
Pulling Out | N26 GmbH, a German mobile bank backed by billionaires Peter Thiel and Li Ka-Shing, said it will end U.K. operations, citing Brexit. The bank will close U.K. accounts on April 15, it said in a statement.
Free Movement | In a move with parallels to Brexit, Switzerland’s euroskeptics want to stop citizens of EU countries being free to take up jobs and live in Switzerland without special permission. A plebiscite will be held on May 17 to decide the matter. The Swiss government opposes the measure and insists the EU won’t budge.
Awkward Fit | Without the U.K., Germany is being pushed into an EU role it hates—and has been trying to avoid for half a century, Andreas Kluth writes for Bloomberg Opinion.
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To contact the editor responsible for this story: Caitlin Morrison at cmorrison59@bloomberg.net, Edward Evans
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