The chief negotiator of the European Union has stamped out expectations of a special deal for the City after Brexit.
Michel Barnier eliminated the idea that a bespoke deal could be agreed upon for the financial services sector.
“There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn’t exist,” Barnier stated in an interview with the Guardian.
He stated that by leaving the Single Market, it was unavoidable that companies would lose passporting rights that enable them to freely operate across the region.
In September, Chancellor Philip Hammond informed the City that he would help in crafting a “bespoke deal” for the critical sector in negotiations.
And David Davis, the Brexit secretary, has drawn hopes of a “Canada-plus, plus, plus” deal that would involve ramping up existing deals with countries that are outside the European Union in order to include services key to the economy.
Earlier, Barnier has signalled a Canada model as a basis for a trade model in the future. However, Prime Minister Theresa May has renounced that as not good enough.
However, Miles Celic, the TheCityUK chief executive, said that a lack of precedence for such a deal should not preclude one in future.
Celic stated: “It might be Christmas, but Michel Barnier doesn’t need to play Scrooge. Just because financial services have not been encompassed in free trade agreements to date is no reason to dismiss them from a future UK/EU free trade agreement.
“Services make up around 80 percent of the UK’s economy – and around 70 percent of the EU’s, with financial services making up a significant component of that. It is vital for the future competitiveness of the UK, and Europe as a whole, that UK and EU negotiators work to secure an ambitious and comprehensive deal.”