U.K. slams EU over Brexit finance ‘threats’ as relations sour

by Bloomberg May 13, 2021

Boris Johnson’s government hit back at the European Union over the prospect of British finance firms being denied access to the bloc’s single market due to the ongoing spat over fishing rights.

“This is another example of the EU issuing threats at any sign of difficulty, instead of using the mechanisms of our new treaties to solve problems,” Johnson’s spokesman, Max Blain, told reporters Thursday, responding to reports France is looking to stall an agreement on financial regulatory cooperation while the fishing dispute is unresolved. “We’ve always been clear that an agreement on financial services is in the interests of both sides.”

It’s the latest flash-point in the increasingly testy relations following the U.K.’s departure from the EU, with market access being used as leverage in the row over fishing rights. French President Emmanuel Macron’s government faces unrest in the country’s northern fishing ports over delays in obtaining licenses to continue fishing in U.K. waters, and is seeking to put pressure on Johnson.

Tensions reached a new level last week when France and the U.K. dispatched navy ships to the British island of Jersey, where dozens of French boats had staged a protest. While the fishermen are back in port and negotiations are set to restart, France is complaining that many crews are still awaiting licenses to resume working in Jersey’s waters.

The U.K. is taking a “consistent, evidence-based” approach to licensing EU vessels, Blain said, using evidence supplied by the European Commission.

U.K.-EU cooperation on financial services has been dragged into the argument. At the end of March, both sides 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, a non-binding Memorandum of Understanding would help speed up the process and be a first step on future cooperation.

Now France aims to delay the agreement until it considers that the British government is honoring its post-Brexit commitments on fishing.

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.