Brussels drops UK-EU banking veto after Rishi Sunak’s Brexit deal
Brussels has dropped its veto on a banking deal between Britain and the EU following the signing of Rishi Sunak’s Brexit deal.
The European Commission had been blocking an agreement to boost financial services cooperation until the Northern Ireland row was resolved.
A memorandum of understanding was thrashed out between the two sides in March 2021 but then put on ice as relations nosedived.
But it is now set to be revived following talks between James Cleverly, the Foreign Secretary, and Maros Sefcovic, vice-president of the European Commission.
The pair met in London on Friday to sign off on the Windsor pact, which has ended the bitter two-year stand-off over the Northern Ireland Protocol.
In a joint statement afterwards, they said the deal was expected to unlock improvements in cross-Channel ties on trade, energy and security.
“They looked forward to the signing of Memoranda of Understanding on financial services and on intellectual property soon,” the read-out said.
The agreement will bring banking cooperation out of a deep freeze and is seen as the first step towards a wider deal with the EU for the City.
It will set up a new joint forum where senior figures from the two sides will meet regularly to discuss upcoming regulation and challenges in the sector.
Industry figures hope that, over time, it will improve trust levels to the extent that Brussels will drop its refusal to grant market access, known as equivalence.
Miles Celic, chief executive of TheCityUK, said: “This will be a vital step towards ensuring continued industry cooperation and continuity between the UK and EU.”
In a sign of markedly improved relations, Brussels has also agreed to look at new ways that trade barriers faced by British exporters can be eased.
Working groups will be set up to explore cutting border bureaucracy on both sides of the Channel “as a matter of priority”, the joint statement said.
Britain’s membership of the EU’s flagship science and research programme Horizon, which was also frozen because of the Protocol row, is now set to be revived.
Mr Cleverly and Mr Sefcovic pledged to “maximise the potential of the relationship between the EU and the UK in ways that benefit both parties”.
The Windsor deal sailed through the Commons on Wednesday despite a Tory rebellion led by Boris Johnson and Liz Truss, the former prime ministers.
It will slash border checks on goods going from Great Britain to Northern Ireland as well as reducing the amount of EU law applied in the Province.