Brussels plans to target UK’s strength as a financial centre by threatening firms with loss of access to European markets and data as it prepares for a cross-channel trade war after Brexit
- The EU wants the UK to stick to its rules and regulations after Brexit happens
- Companies could also lose access to data vital for finance and telecoms firms
- But Boris Johnson has already signalled that he intends for the UK to diverge
Brussels is planning to target the UK’s strength as a financial centre after Brexit as it prepares for fiery trade deals with Britain, it emerged today.
The EU will threaten City firms with a lack of access to continental markets unless it agrees to maintain ‘equivalence’ – a level playing field for rules and regulations.
British commerce could also lose access to important data flows under plans being prepared by the bloc.
With Brexit expected to happen smoothly on January 31, the following 11 month are expected to see frenetic activity to establish at least an outline trade deal by December 2020.
But Boris Johnson has already signalled that he intends for the UK to diverge in many areas from EU standards and systems as it seeks a business advantage over the continent.
‘These are both big levers for the EU,’ an EU source told the Times.
‘Data adequacy and equivalence are decisions under our direct control, decisions that can be reversed at any time and that will be linked to progress in the wider negotiations.’
The EU will threaten City (pictured) firms with a lack of access to continental markets unless it agrees to maintain ‘equivalence’ – a level playing field for rules and regulations.
Boris Johnson has already signalled that he intends for the UK to diverge in many areas from EU standards and systems as it seeks a business advantage over the continent
If the two sides cannot hammer out an agreement they can both live with by the end of December next year the UK would leave the transition period – a post Brexit buffer zone – without a trade deal in place.
This would mean firms would do international business under World Trade Organiation (WTO) rules until a deal can be agreed.
The Brussels plans seen by the Times suggest that it would allow UK finance firms access to European markets as long as they continue to adhere to EU regulations and standards of practice.
But it would be allowed to block that access with just 30 days notice if the situation changed.
These could be political changes sparked by law changes introduced in Westminster designed to give UK firms a better chance of thriving on the world stage.
It is also said to be considering an ‘adequacy’ block on personal data across the channel, which could impact service sector companies and potentially security co-operation.
Mr Johnson last week put the UK on the path to a showdown with Brussels after he refused to be shackled to the bloc’s rules in the future.
After the Prime Minister’s withdrawal deal sailed through the Commons he told MPs that the ‘oven was on’ when it came to delivering Brexit next year
But he insisted there would be ‘no alignment’ to EU rules once the transition period ends in 2020.
He said: ‘The Bill ensures that the implementation period must end on December 31 next year, with no possibility of an extension, and it paves the way for a new agreement on our future relationship with our European neighbours, based on an ambitious free trade agreement.
‘This will be with no alignment on EU rules, but instead with control of our own laws, and close and friendly relations.’
It prompted Charles Michel, the successor to Donald Tusk as European Council President, to suggest in a tweet that ‘a level playing field remains a must for any future relationship’.