UK and EU progress talks on finance as Lords warn 'no-deal Brexit' for goods is still possible

Mon 22 Mar 2021
Posted by: William Barns-Graham
Trade News

brexit talks

The UK and EU are close to agreeing a memorandum of understanding (MoU) on which to base further negotiations on financial services. 

The sector was left out of last year’s trade deal and both have sides have downplayed the likelihood of an ‘equivalence’ agreement being reached through which the UK would maintain pre-Brexit levels of market access to the EU.

However, the two sides have agreed to continue negotiations by setting up a new forum in which financial regulation and supervision can be discussed, according to the FT

'Stable and durable'

Although the agreement will not prevent barriers being erected between the UK and EU for the sector, it will create “a stable and durable” platform or “talking shop” through which co-operation can be achieved, EU finance minister Mairead McGuiness told the BBC’s Andrew Marr show. 

The remit of the new forum would include discussions on preserving financial stability, market integrity and protecting investors and consumers, as well as considering how to move forward with equivalence.

McGuinness is to meet Bank of England governor Andrew Bailey today (22 March) to assess progress.

No-deal

Members of the House of Lords’ European Union committee, however, have warned that the threat of a ‘no-deal’ scenario for goods could still come about if the EU does not ratify the trade agreement signed by both parties at the end of last year.

The deal is due to be ratified by 30 April and the UK has granted a ‘technical’ two-month extension for the European Parliament and Council to scrutinise the deal further, according to Politico.

If the EU were to not ratify, it remains possible that the UK and EU would continue trade under WTO rules and tariffs.

Noises from Europe

The Guardian reports warnings from peers about “noises” coming from Europe indicating the deadline may be missed.

Disputes over the Northern Ireland Protocol in particular “reflect and compound a broader breakdown of trust between the UK government and the EU”, it states.

Vaccine veto

The report comes as Boris Johnson lobbies EU member states to veto a move from Brussels to block exports of vaccines, the FT reports.

The PM is due to call his counterparts in France, Germany, Belgium and the Netherlands ahead of a European summit which will decide whether Brussels will block vaccine exports to the UK and other vaccine-producing countries.