EU's Barnier Casts Fresh Doubt on May's Post-Brexit Blueprint

(Bloomberg) -- European Union chief Brexit negotiator Michel Barnier raised fresh doubts that the bloc will accept Theresa May’s plan for future economic ties that was agreed to at a U.K. cabinet meeting last week.

In his first public appearance since the blueprint was announced on Friday, Barnier signaled that the EU won’t back down in its insistence that the U.K. can’t have access to the bloc’s single market by keeping identical regulations in goods while diverging in services. Even though May received cautious backing from within her party for the plan, the fragile consensus could break down if she gives in to any EU demand for more concessions.

“We will protect this single market, which is based on the indivisibility of what we call the four freedoms -- of people, goods, services and capital,” Barnier told a conference in New York on Tuesday. “This eco-system for rules, norms, standards for goods and services” is the “foundation of the European Union.”

EU diplomats haven’t started going through the U.K. plan yet. While some of the remaining 27 governments will take a softer line than Barnier, there’s little appetite to compromise on the EU’s principles and allow Britain to opt in and out of different parts of the single market.

Barnier said the need to uphold the EU’s rules applied also in the area of financial services because “what is at stake is the financial stability of the EU.”

He reiterated that the EU could offer the U.K. only the same system of equivalence in financial services as the U.S. enjoys. That would see the EU decide unilaterally that U.K. laws are as strict as its own, but also have the power to withdraw the system at short notice.

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