Europe and the United Kingdom have yet to negotiate a financial agreement that allows for something like the pre-Brexit status quo.
Photographer: Hollie Adams / Bloomberg
Photographer: Hollie Adams / Bloomberg
The European Union is unlikely to grant equivalence to the UK in financial services, with a divergence between the two “the most likely scenario” in the coming years, Goldman Sachs Group Inc. advisor, Jose Manuel Barroso, said.
“I personally believe that there will be no permanent equivalence decision on the European Union side when it comes to financial services,” Barroso said in a Moody’s Investor Services webinar on Thursday. “It is more or less inevitable, irreversible, a trend of progressive divergence,” he said.
Comments by Barroso, who led the European Commission for a decade until 2014, highlight the hard line the EU has taken on the issue so far. Europe and the United Kingdom have yet to negotiate a financial agreement that allows for something like the pre-Brexit status quo. The talks scheduled to end in March revolve around a path to cooperation and are mainly symbolic in relevance, while any decision on equivalence is unlikely to take place anytime soon.
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“It is clear” that the EU wants more business to be transferred from London to the euro area as a result of Brexit, added Barroso. The bloc wants the “displacement” of some capital, people and “risk management from the UK to the euro area and the European Union in general,” he said.