UK cannot have a special deal for the City: EU's Brexit negotiator
Brussels: Britain cannot have a special deal for the City of London, the European Union's chief Brexit negotiator has told the Guardian, dealing a blow to Theresa May's hopes of securing a bespoke trade agreement with the bloc.
Michel Barnier said it was unavoidable that British banks and financial firms would lose the passports that allow them to trade freely in the EU, as a result of any decision to quit the single market.
"There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn't exist." He said the outcome was a consequence of "the red lines that the British have chosen themselves. In leaving the single market, they lose the financial services passport."
The stark declaration quashes the hopes of the Brexit secretary, David Davis, for a unique trade deal that would include financial services. The Brexit secretary has called for a "Canada plus plus plus" deal with the EU, a reference to the free trade agreement struck between Ottawa and Brussels in 2016, but with the crucial addition of financial services.
In an exclusive interview with European newspapers, including the Guardian, Barnier gave examples of his own three pluses – judicial cooperation, defence and security and aviation.
The negotiator also said:
A trade deal could be agreed within a two-year transition period, but would have to be ratified by more than 35 national and regional parliaments.
The UK could not stop Brexit unilaterally, arguing that overturning the decision to leave would require the consent of 27 EU member states – a view at odds with one of the authors of article 50, Lord Kerr.
The UK must follow all rules and regulations of the EU during the transition period, including new laws passed after the UK has left.
The UK could negotiate trade agreements with the rest of the world during the transition, but they could not come into force. He would not confirm British estimates that the final Brexit bill – the UK's outstanding obligations to the EU – would be no more than €45bn (£39bn).