France Aims to Block U.K. Finance Firms From EU Over Fishing Rights Spat

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France aims to delay access to the European single market for U.K. financial firms until it considers that the British government is honoring its post-Brexit commitments on fishing rights, according to people familiar with the matter.

French officials are looking to stall a regulatory cooperation agreement on finance as part of a broader effort to bring pressure to bear on the U.K., the people said, asking not to be named discussing private conversations. The non-binding Memorandum of Understanding would be a first step on future cooperation and pave the way to granting market access to U.K. firms further down the track.

The French reluctance to let even that come into force shows how British hopes for access to European Union financial markets are fraught with politics. The French are determined to hold the line on Britain’s commitments in the post-Brexit trade agreement amid unrest in the country’s northern fishing ports over delays in obtaining licenses to continue fishing in U.K. waters.

France Aims to Block U.K. Finance Firms From EU Over Fishing Rights Spat

A British official defended the government’s approach to licensing EU fishing boats, saying it was acting in a consistent way based on information supplied by the European Commission. The official said the plan to block the MoU was another example of the EU making threats at any sign of difficulties, instead of trying to solve problems through the processes set out in in the Brexit agreement.

French government spokesman Gabriel Attal confirmed that France has tied financial access to the EU to the issue of fishing, and repeated calls for the U.K. to comply with its Brexit commitments.

Tensions between the U.K. and France reached a new level last week when ships from both navies were dispatched to the British island of Jersey, just a few miles off the French coast, where dozens of French boats had staged a protest. While the angry fishermen are back in port for now and negotiations between France and Jersey are set to restart, France is complaining that many crews are still awaiting licenses to resume working in Jersey’s waters.

EU Summit

Negotiations over fishing rights were one of the most contentious elements of the post-Brexit trade accord signed by the two sides last year. The deal largely sidelined the finance industry and the EU has since said that it’s in no rush to grant the equivalence rulings that would restore trading rights for British firms.

Before the MoU can be implemented, all 27 EU members must sign off and that formal procedure hasn’t yet started. The process could begin in the coming days, according to people familiar with the matter.

EU leaders will discuss relations with the U.K., which has breached the Brexit deal on Northern Ireland and fishing, when they meet in Brussels at the end of the month, according to the French Ministry of Foreign Affairs.

At the end of March, Britain and the EU had agreed on a forum regarding cross-border financial market access. While granting so-called equivalences that would allow U.K. financial firms to do business in Europe remains a separate and unilateral process, the MoU would help speed up the process.

Since Brexit took effect at the beginning of 2021, London-based financial firms have been largely unable to operate in the bloc, forcing banks like JPMorgan Chase & Co. and Goldman Sachs Group Inc. to move billions of dollars in assets and thousands of staff to the continent.

©2021 Bloomberg L.P.

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